Internationally, the World Steel Association expects a recovery in steel demand. The pressure on price-cost spreads is proving to be unsustainable and consequently there has been some positive movements on international pricing in early 2023, the sustainability of which remains untested.
According to the South African Reserve Bank, 2023 GDP is expected at 0,3%. A better local trading environment is expected in the first half of 2023. As it did in 2022, the Company will react swiftly and decisively to the difficult market conditions.
ArcelorMittal South Africa will increase volumes through targeting import replacement and Africa overland volumes, adopt a flexible approach to operating plants in reaction to the available order book, adjusting fixed cost levels accordingly, and following an assertive cash management process.
Exchange rates will continue to have an impact as will rail service and electricity reliability.
The business is positioned to navigate the immediate and near-term challenging market conditions while remaining focused on its longer-term objectives, namely, to leverage off the long-term investment case for steel and the vital role it will play in the re-industrialisation of the South African economy and the transition to a low carbon, circular economy.