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Paris (AFP)- Global steel giant ArcelorMittal on Thursday posted record annual profit in 2021 but warned that cutting its carbon emissions put the group at financial risk.
As commodity prices soared as economies recovered from the pandemic, the world’s second-largest steelmaker posted a net profit of $14.9 billion (13 billion euros) in 2021, rebounding from a loss of $733 million in 2020.
“The global economic rebound, following the lifting of initial Covid-19 restrictions, has supported sustained demand across all markets, delivering very strong levels of profitability,” Chief Executive Aditya Mittal said.
But he said pressure to cut carbon emissions in the steel industry, one of the most energy-intensive on the planet, risked hitting profits.
The Luxembourg-based group aims to reduce carbon intensity by 25% globally by 2030 and by 35% in Europe.
Mittal said steel production costs could rise in Europe if European industry faces unfair competition from other parts of the world.
“There is a risk because, as you know, the steel industry is global. If there is a higher cost in Europe and there is no higher cost in other regions, European industry can be undermined,” Mittal told reporters.
The European Union is considering a carbon border adjustment mechanism that would increase the price of certain carbon-intensive imports from regions with less stringent emission reduction rules.
Mittal’s warning about the need for a “level playing field” around the world rattled investors, sending the company’s shares plummeting in Paris.
Decline in production
The group, which was the world’s largest steel producer until it was overtaken by China’s Baowu in 2020, saw its crude steel output fall last year to 69.1m tonnes compared to 71.5 million in 2020.
Iron ore production also fell to 58 million tonnes from 50.9 million in 2020.
This was largely caused by a drop in steel deliveries to the automotive industry, particularly in Europe, which has been hit hard by the global shortage of semiconductors.
ArcelorMittal nevertheless recorded a huge profit in 2021, after economies started to emerge from Covid restrictions, demand for raw materials and commodities soared and prices consequently surged.
The group’s turnover jumped 44% to 76.6 billion dollars last year.
Sales rose 43.7% to $76.6 billion as steel selling prices doubled.
Steel shipments rose 9.2% to 61.9 million metric tons, boosted by the recovery in demand.
Looking ahead, ArcelorMittal said it expects global steel consumption to grow by only 1% in 2022, compared to 4% in 2021. Much of future demand would come from the automotive sector .
The company announced a $1 billion share buyback program for the first half of 2022.
Despite an upbeat report to investors, ArcelorMittal admitted it had not done enough to improve the health and safety of its workers and needed to “do better…with an absolute focus on eliminating fatalities.” “.
The IndustriALL union – which says it represents 50 million workers worldwide, many of them in heavy industry – issued a statement in March 2021 denouncing fatal accidents at ArcelorMittal factories in Kazakhstan, Poland, South Africa , Spain and Ukraine.
© 2022 AFP