AMSA posts wider loss, hopes for interest rate cut
ArcelorMittal South Africa (AMSA) said on Thursday it is hoping for an interest rate cut during the second half of the year after losses widened on weaker demand.
It logged a loss of R1.11-billion in the six months to June 30, compared to a loss of R448-million in the same period last year.
In addition to difficult trading conditions in local and regional markets, it has been hurt by operational interruptions for two blast furnaces at Vanderbijlpark.
Crude steel production during the first half slid 10% to 1.2 million metric tons, while sales volumes dipped 2% to 1.2 million tons. Realised rand steel prices dropped 3%.
"Domestically, the potential for interest rate cuts as well as a focus on infrastructure-build by the Government of National Unity may bring much needed support to the demand dynamics in the local market," the company said in a statement.
South Africa's central bank is expected to cut its main interest rate in September, with another cut seen in November according to a Reuters poll.
This month, the South African company decided against shutting a steel plant, noting improvements in electricity availability, port and rail efficiencies as well as the lifting of a ban on scrap exports.
Parent company ArcelorMittal, the world's No. 2 steelmaker, reported on Thursday that second-quarter core profit tumbled 38% on low steel prices although the result was ahead of expectations.
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