SOUTH AFRICAN IRON AND STEEL INSTITUTE
7 November 2014 - ArcelorMittal South Africa - Operational information for the quarter ended 30 September 2014
Update on reline of blast furnace
The reline of the blast furnace in Newcastle which commenced in May 2014 was recently completed. The furnace is currently ramping up and it is expected to be in full production by mid-November 2014.
Liquid steel production was 340 000 tonnes or 25% lower than the corresponding period last year due to the planned reline of the blast furnace. The effect of the reline of the blast furnace at Newcastle not producing 400 000 tonnes was partly offset by higher production volumes at Vanderbijlpark. The company was running at 62% capacity overall compared to 83% for the same period last year.
Local sales were 12 000 tonnes or 3% lower than the corresponding period last year driven mainly by flat products which were down due to the effect of the metal and engineering strike at the beginning of the quarter. Despite the reline at Newcastle, long products local sales were in line with last year as a result of buffer stocks produced before the reline and the import of billets which were used to continue producing the long steel products.
Export sales decreased by 69 000 tonnes or 19% driven mainly by long products following the reline refurbishment project in Newcastle.
The sales of commercial coke were 50 000 tonnes or 32% lower than the corresponding period. The company experienced sorting problems of coal in quarter two at Newcastle which limited the stock available for sale in quarter three.
Outlook for quarter four
As the blast furnace at Newcastle is expected to complete its ramp up by mid-November 2014, total steel capacity utilisation is expected to move back above 80% as all other units will maintain their current production levels. Sales should also increase despite the usual seasonal impact during the festive period.
As reported in our interim results in August 2014, ArcelorMittal South Africa has been experiencing tough trading conditions mainly due to lower steel demand, increased competition from China and low operating efficiencies.
ArcelorMittal South Africa is entering a turnaround phase with a focused strategy of producing to capacity, reducing costs and embarking on a more aggressive sales strategy while improving relations with government.
ArcelorMittal South Africa remains committed to the development of the South African steel industry and to the role that the company plays in the ongoing social and economic transformation of communities around its operations and the South African economy as a whole.