ArcelorMittal says that it has seen recovery in its core markets during the first quarter of 2016, the company reveals in its operating statement for the period sent to Kallanish. While Ebitda fell quarter-on-quarter, the steelmaker turned its Q4 2015 operating loss back to profit and reduced its net loss both year-on-year and q-o-q.

“Our results for the first quarter reflect the very tough operating conditions in the second half of 2015. Since that time we have seen a recovery in spreads in our core markets to more sustainable levels, which is expected to result in improved results in the coming quarters. This is a welcome development, although given the levels of excess capacity in China the market remains fragile and we must continue to be vigilant and active against the threat of unfair trade,” says chairman and ceo Lakshmi Mittal.

In its outlook and guidance the company says that based on the current economic outlook, ArcelorMittal expects global apparent steel consumption to grow slightly in 2016 as compared to 2015. The impact of the improving steel spread environment is expected to be fully reflected in the results of the second half of the year. It expects FY 2016 Ebitda to be in excess of $4.5 billion and that improving market conditions are likely to consume working capital in 2016 (current estimate of ~$0.5 billion). The company nevertheless, expects to be free cash flow positive in 2016, it confirms.

The group saw its average steel selling prices tumble q-o-q in all regions during Q1 2016 (see table). These were also -22.1% lower y-o-y on a global scale.

Source: ArcelorMittal

Global crude steel production at 23.2 million tonnes grew by 7.4% q-o-q and fell only slightly y-o-y.

Global sales revenue increased very slightly from Q4 2015 at $13.4 billion. A net loss of $0.4 billion in Q1 2016 compares with a net loss of $6.7 billion in Q4 2015. Excluding exceptional and non-cash items, adjusted net loss was $0.2 billion in Q1 2016 as compared to adjusted net loss of $0.4 billion in Q4 2015.