ArcelorMittal saw mining impairment charges and inventory write-down help drive the steelmaker to a loss in 2015. Chairman and ceo Lakshmi Mittal expects that 2016 will be another difficult year for the steel and iron ore industries. The group has launched a new strategic plan dubbed 'Action 2020'.

In its operating report for the fourth quarter and full year 2015 monitored by Kallanish, ArcelorMittal says that it expects global apparent steel consumption (ASC) to increase by 0-0.5% in 2016. This is based on expected ASC growth in the US and EU28 markets of 3-4% and 0-1% respectively. In 2015 global ASC fell by -2.2% fuelled by heavy reductions in the US, Chinese, CIS, and Brazilian markets.

 “Looking ahead, although we have started to see a recovery in Chinese steel spreads from 2015 lows, 2016 will be another difficult year for our industries.  It is clear that China has a challenge to restructure its steel industry for a lower growth economy but we are somewhat encouraged by recent comments concerning capacity closures.  Until this situation is fully addressed the effective and swift implementation of trade defence instruments will be critical and we expect to see more positive rulings in this regard during the year,” says Mittal.

Most major financial indicators turned downwards for the steelmaker in 2016. Sales fell year-on-year by -19.8% to $63.6 billion for the full year and Ebitda reduced by -27.7% to $5,231 billion. The consequent net loss of $7,946 billion was driven by impairments, exceptional charges and non-cash forex. Net debt lowered by $0.1 billion year-on-year in 2015

Full year crude steel production fell back slightly from 2014 by -0.6% to 92.5 million tonnes while steel shipments also decreased from 85.1mt in 2014 to 84.6mt during 2015. ArcelorMittal’s own Iron ore production also lowered by -1.7% to 62.8mt, although iron ore shipped at market price upticked slightly by 1.3% to 40.3mt.

The company has also launched its so-called ‘Action 2020’ plan. “Our priority is to ensure we deliver on our financial targets and strategic projects,” says Mittal.  “We have today announced a new strategic plan for the period to 2020 following a detailed analysis of performance improvement potential across the group.  ‘Action 2020’ sets out specific targets for each business segment which combined aim to achieve a further $3.0 billion of Ebitda improvement potential and enable the business to generate $2.0 billion of annual free cash flow.”