Steelmaker ArcelorMittal downbeat on key European market

  • Business Premium
  • Thursday, 09 May 2019

The tariffs, announced by U.S. Commerce Secretary Wilbur Ross in a telephone briefing on Thursday, ended months of uncertainty about potential exemptions and suggested a hardening of the Trump administration's approach to trade negotiations. (Picture shows a red-hot steel plate passing through a press at the ArcelorMittal steel plant in Ghent, Belgium, May 22, 2018. - Reuters)

BRUSSELS: ArcelorMittal, the world's largest steelmaker, cut its demand forecast for its key markets on Thursday and said it was facing the twin challenges of lower steel prices and reduced consumption in Europe.

The Luxembourg-based company, which makes around 6 percent of the world's steel, announced on Monday that it was temporarily reducing European steel output by 3 million tonnes on an annualised basis due to weak demand and increased imports.

"Our first quarter results reflect the challenging operating environment the industry has faced in recent months." Chief Executive Officer Lakshmi Mittal said in a statement.

The company reported a first-quarter core profit (EBITDA) of $1.65 billion, a 34-percent decline from a year earlier and below the company-compiled consensus of $1.68 billion.

Profitability, Mittal said, had been hit by lower steel pricing due to weaker economic activity and global overcapacity, as well as from rising raw materials costs.

ArcelorMittal increased its growth forecast for 2019 global apparent steel consumption, which also reflects changes in inventory levels, to 1.0-1.5 percent from its February guidance of 0.5-1.0 percent.

However, the major change was its more bullish view of China, the world's largest steel consumer and producer, but where ArcelorMittal almost has no business.

Nearly half of ArcelorMittal's steel is produced in Europe, with just under 40 percent in the Americas.

Excluding China, growth this year would be 1.0-2.0 percent, down a percentage point from ArcelorMittal's earlier view. It now sees contraction in Europe and has a more moderate view of expansion in Brazil.

It left its growth forecasts for the United States and the former countries of the Soviet Union unchanged. - Reuters

Article type: metered
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights

Next In Business News

7-Eleven Malaysia to expand pharmacy business into Indonesia via JV� Premium
KPower registers lower Q1 profit due to lockdown woes� Premium
Glove stocks rally as new Covid-19 variant spooks investors � Premium
IJM Corp posts RM639mil net profit in Q2 on disposal gain� Premium
Axiata signs science-based target initiative pledge to commit to net zero initiative Premium
Aurelius Technologies aims to raise RM104.73mil from Main Market listing Premium
Sime Darby earnings impacted by China industrial slowdown in Q1FY22 Premium
Hong Leong Bank posts stronger Q1FY22 earnings of RM858.25mil Premium
Malaysia's exports for Jan-Oct 2021 surge 25% to top RM1 trillion Premium
Bursa pares losses but remains broadly lower Premium

Others Also Read