World's Largest Steelmaker Arcelormittal Cost-Reduction Measures

Hit hard by the COVID-19 pandemic, global steel giant ArcelorMittal continues to focus on cost reduction initiatives to protect profitability as it navigates the evolving demand backdrop. Moving forward, as economic activity recovers the company will respond by increasing production, leading to the return of some fixed cost. The world's largest steelmaker had logged a net loss of USD 559 million for the second quarter ended June 2020 and termed it as the most difficult period in its history. The easing of lockdown measures has seen activity levels improving, nevertheless the demand remains significantly below normal and the pace and profile of recovery is uncertain, it said. "At the same time, the experience of the last 4-5 months has, through necessity, forced the business to operate differently. It has shown that it is possible to operate with a leaner cost structure," the company emphasised. It is now using this experience to identify and develop options for further structural cost improvements to appropriately position the fixed cost base for the post COVID-19 operating environment, ArcelorMittal said. The Luxembourg-headquartered company pointed out that it expects certain cash needs of the business to total USD 3.5 billion in 2020 and said it remained focused on achieving its USD 1 billion operating working capital efficiency target for 2020.