A global shortage of steel due to a sharper than expected recovery in nearly all markets has pushed international steel prices back to their highest since 2008, helping ArcelorMittal SA narrow its losses.
China's voracious demand for steel returned almost immediately after it emerged from lockdown in early 2020. But with other steel-producing countries still restricting factory activity because of Covid-19 the supply just wasn't there.
It wasn't just China; ArcelorMittal South Africa (AMSA) says the recovery was in nearly all international markets, including local demand from the construction and automotive sectors. Combined with nine-year-high iron ore prices and increasing prices for other raw materials, the deficit has pushed international steel prices back to levels last seen in 2008.
AMSA took advantage of the deficit, restarting its second blast furnace at Vanderbijlpark to support the supply of flat steel. It also decided to keep its electric arc furnace at Vereeniging in operation instead of mothballing it towards the end of 2020 as planned.
Even before prices recovered, the South African steelmaker was taking steps to address a business struggling to make a profit by cutting costs, reducing its workforce and reconfiguring its operating model. That included winding down its Saldanha...