CHARTS: The coming critical minerals trade war is BRICS short of a load
"While a large number of countries around the world continue to talk about securing raw material supply, China is actually doing something about it."
The world’s largest steelmaker, ArcelorMittal (NYSE:MT), has reported a net loss of $2.5 billion for 2013 – a $1.2 billion improvement on the 2012 financial year.
The loss is largely the result of impairment charges and restructuring costs.
Operating profit – earnings before interest, tax, depreciation and amortisation (EBITDA) – of $6.9 billion were slightly lower than the year before and net debt decreased by more than 25%. The company ended the year with its lowest net debt level since its creation in 2006.
Lower steel prices dragged sales down by 5.7% to $79.4 billion.
Outlook
ArcelorMittal says it’s “cautiously optimistic” for 2014 and is forecasting EBITDA earnings of approximately $8 billion.
But the steelmaker cautions that this performance hinges on several key conditions. Most importantly, steel shipments need to increase by 3% and marketable iron ore shipments must rise by 15%. Canadian mines, having reached full ramp-up in December, should help boost iron ore volumes.
Based on the current economic outlook, especially in regards to European manufacturing activity, ArcelorMittal excepts global steel consumption to grow by as much as 4% this year.
The outlook is also based on an average iron ore price in line with the market consensus (approximately $120 per tonne for 62% Fe CFR China) and a moderate improvement in steel margins.
“While there remain risks to the global demand picture, ArcelorMittal expects the fundamentals, particularly in our key markets in the developed world, to be more supportive in 2014 than in 2013,” the company wrote in its 2013 report.
The company is targeting net debt of $15 billion in the medium term and will not increase dividend payments until that point. In a separate announcement, the steelmaker announced a yearly gross dividend of 20 cents per share, to be paid out in July 2014.
The Luxembourg-based company’s share price spiked early Friday morning on the New York exchange but by mid-afternoon was trading down to Thursday’s range of around $17 per share.
