ArcelorMittal upbeat on US market
Brussels, May 10, 2014
ArcelorMittal, the world's largest steelmaker, trimmed its forecast for global steel demand due to a sharper Chinese slowdown and weakness in Russia, though it expressed optimism about its core European and US markets.
The company, which makes about six per cent of world steel and is a broad gauge for the health of global manufacturing, said apparent steel consumption - which includes inventory changes - should increase by between three and 3.5 per cent in 2014.
That compared with its previous forecast, given in February, for growth of between 3.5 and 4 per cent and last year's 3.5 per cent expansion.
ArcelorMittal itself, which sells about 85 per cent of its steel in Europe and the Americas, retained its own forecast that it would report a core profit of about $8bn in 2014, up from $6.9bn in 2013.
It said this was predicated on a 3 per cent increase in steel shipments, a moderate pick-up of steel margins, 15 per cent higher iron ore sales and average ore prices of about $120 per tonne. They have fallen to about $105 now.
Analysts said first-quarter results were broadly in line with expectations, with solid numbers in Brazil and Europe and weakness in a weather-hit US and its mining business, where ArcelorMittal is seeking to increase iron ore output.
ArcelorMittal, more than double the size of its nearest rival by output, reported first-quarter core profit (EBITDA) of $1.75 billion, the same as the average expectation in a Reuters poll of brokers. Last year, the figure was $1.57bn.
The company said its steel earnings per tonne increased in every segment except North America, which was hit by an extremely cold winter.
The company said prospects for Europe and the US were encouraging and it was cautiously optimistic for the rest of 2014, raising its forecast for EU steel consumption growth by 0.5 percentage points to 2-3 per cent. It sees the US market growing by 4 per cent this year.-Reuters