ArcelorMittal sees tough market continuing into H2
ArcelorMittal, the world's largest steelmaker, forecast tough market conditions would continue into the second half of the year, particularly in Europe, after a divestment gain swelled second-quarter earnings and helped it cut debt.
Steelmakers globally are struggling with falling demand in Europe and Japan and slowing growth in China, the world's largest producer and consumer. The only bright spot has been a pick-up in the Americas.
"Market conditions in the first half have been very challenging, indeed more challenging than we had expected due to a combination of factors, not least the still unresolved crisis in the eurozone," chief executive Lakshmi Mittal said in a statement.
He added the company expected operating conditions to be broadly similar in the second half.
"Europe remains our biggest concern and the severity of the situation is reflected in the performance of our European operations. Our focus throughout the remainder of the year remains on further improving competitiveness and reducing debt."
The steelmaker, whose capacity is more than double that of its nearest rival, said on Wednesday it sold less steel in the second quarter than in the first three months, but at higher prices and it benefited from a rebound in iron ore mining volumes.
ArcelorMittal said quareterly core profit (EBITDA) was $2.45 billion, against the average forecast of $2.18 billion in a Reuters poll.
However, the second-quarter number included a $339 million gain from the sale to Nucor Corp of U.S. specialist steel distributor Skyline Steel, part of its bid to bring down debt.
Stripped of that gain, first half core profit was marginally below that of the second half of 2011. ArcelorMittal had forecast it would be higher.
The company gave no concrete outlook, but said steel shipments would be lower in the second half than the first, with similar earnings per tonne. Iron ore shipments are still seen up 10 per cent over the full year.
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