Africa's largest steel producer, ArcelorMittal South Africa, has announced that in the third quarter this year its crude steel production decreased by 5.7 percent year on year to 1.11 million mt, mainly due to the planned mini-reline at its Saldanha Works resulting in approximately 110,000 mt of lost production. Despite the lost production, the company ran at an effective capacity utilization of 73 percent compared to 72 percent in the same quarter of 2015.
Regarding sales volumes in the third quarter, ArcelorMittal South Africa's domestic sales amounted to 814,000 mt, up 2.5 percent, driven mainly by flat products, while export sales decreased by 64.2 percent to 136,000 mt, both year on year. In the given quarter, exports of flat products were 140,000 mt lower largely due to the reline and weak international demand. Long products were 104,000 mt lower as a result of weak international demand which was compounded by the strengthening of the average South African rand/US dollar exchange rate in the quarter and the oversupply of steel in the global market.
ArcelorMittal South Africa stated that in the fourth quarter of the current year export sales are expected to increase compared to third quarter, mainly due to increased blue water exports. ArcelorMittal South Africa has been experiencing tough trading conditions mainly as a result of lower steel demand due to poor economic activity and ongoing imports and the company does not expect this to change in the next quarter.