In 2018, ArcelorMittal delivered one of its best financial performances in recent years and the safest year in its 13-year history, but will need to invest in cleaner technologies to ensure a sustainable future, according to the steelmaker's newly released Integrated Annual Review 2018.
Last year, the Luxembourg-based steelmaker had an injury frequency rate of 0.69 incidents per million hours worked, down from 0.79 per million hours in 2017 and 0.83 per million hours in 2016.
"Our 2018 lost-time injury frequency rate of 0.69 was the lowest level we have ever recorded," Chairman Lakshmi Mittal said in the report. "This figure betters industry standards and has vastly improved over the past decade, proving that our safety policies and procedures are strong and the safety training that we consistently deploy through our global operations is making a positive difference."
Ten ArcelorMittal steelworkers still were killed on the job last year.
"We must do better. Nothing is more important than the health and safety of our employees," Mittal said. "Our performance in several of our reporting segments proves that zero fatalities, which is our objective, is possible. I’m therefore convinced this can become a reality and can reassure you that we are fully focused on achieving this objective group-wide. Continuing to progress our efforts to instill a safety-first culture at all our global operations is critical to future progress."
The steelmaker, which has integrated steel mills in East Chicago and Burns Harbor, turned a net profit of $5.1 billion on revenue of $10.3 billion in 2018 amid improved global market conditions.
"For many years the global steel industry has suffered from chronic overcapacity," Mittal said. "While this challenge persists, the significant, permanent supply-side reform we have witnessed in recent years has gone some way to delivering the structural improvement necessary to ensure sustainably healthy market conditions. We also saw a continuing response last year from governments worldwide to address unfair trade, particularly the Section 232 measures that were introduced in the United States and the EU safeguard measures imposed in response."
But steel prices have been falling since peaking last summer, and dropped by about $30 a ton in the United States just last week.
"Market conditions softened towards the end of 2018, with these dynamics carrying into the beginning of this year," Mittal said. "However, general market dynamics are still positive and we forecast continuing demand growth in 2019. The structural industry improvement I discussed earlier has enhanced the steel industry’s resilience, reducing an element of volatility, although overcapacity does remain and we continue to see elevated levels of imports into our markets, particularly in Europe."
ArcelorMittal also will need to try to reduce its carbon footprint as governments across the global pressure heavy industry to lower its emissions. That will require investment in new technology and could mean major changes for how steel mills operate, Mittal said.
"For the steel industry that is no easy task. Decarbonizing steelmaking will depend on fundamentally changing how steel is made," Mittal said. "It will involve advancing breakthrough technologies that either capture and store or re-use carbon; replace coal with alternative, sustainable sources of carbon; or use hydrogen as an agent to reduce iron ore, hence removing carbon from the steelmaking process entirely. We are developing a low-emissions technology strategy, on which we will elaborate in our inaugural climate action report that will shortly be published and are currently building several industrial-scale pilot projects, based on smart carbon or zero-carbon technologies."