Unlike struggling U.S. Steel, ArcelorMittal capitalized off of rising steel prices by turning a $1 billion profit in the first quarter.
The Luxembourg-based steelmaker, one of Northwest Indiana’s largest employers, lost $416 million during the same time last year. It more than doubled its quarterly profit from the $403 million in made in the fourth quarter of last year.
“I am satisfied with the first quarter results, which reflect the anticipated positive momentum in the market and the progress we are making internally to make the business stronger,” Chairman and Chief Executive Officer Lakshmi Mittal said. “All parts of the business reported improved EBITDA as steel prices responded to higher raw material costs and strong volume growth saw steel shipments increase by 5.1 percent compared with the fourth quarter.”
ArcelorMittal’s operating income grew to $1.6 billion in the first quarter, as compared to $800 million in the previous quarter. The company’s earnings before interest, taxes, depreciation and amoritization, or EBITDA, grew by 34.3 percent to $2.2 billion, up from $1.7 billion in the fourth quarter of 2016.
Earnings after steel shipments grew by 5.1 percent to 21.2 million tons and iron ore prices shot up by 21 percent.
“Our mining segment benefited from an increase in iron-ore shipped at market prices as well as the higher raw material price environment,” Mittal said. “Looking ahead, we expect market conditions to be broadly stable in the second quarter. While this is encouraging, the steel industry is still impacted by unfair imports in many of our key markets and we hope to see further progress in ensuring the necessary trade solutions”.
As more tariffs and tougher trade enforcement in the United States restricted supply, prices climbed by 10.2 percent. That helped boost sales to $16.1 billion in the first quarter, as compared to $14.1 billion during the fourth quarter of last year.
ArcelorMittal rival U.S. Steel, the other big steelmaker in Northwest Indiana, did not fare as well in the first quarter, losing $180 million despite improving market conditions. Executives said deep cost cutting and deferred maintenance kept the Pittsburgh-based steelmaker from taking advantage of rising steel prices, which have been averaging well over $600 a ton again in the United States.