ArcelorMittal sees higher profits in Q2 after strong start

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ArcelorMittal, the world's largest steelmaker, forecast higher profit in the second quarter after surprisingly strong earnings in the first three months of the year.

The Luxembourg-based company said demand grew in North America in the automotive, construction and diggers and white goods sectors.

"Europe remains the biggest challenge and during the first quarter we announced the extended idling of a number of facilities inline with our strategy of meeting demand from our more competitive sites," chief executive Lakshmi Mittal said in a statement.

"Although impacted by seasonal factors in the first quarter, our mining business remains a key area for growth and we are targeting a further increase in production in 2012," he continued.

The group said the improvement would come while shipping about the same amount of steel as in the first quarter. It did not say whether the gain would come from higher prices, lower costs or both.

ArcelorMittal repeated its forecast that core profit for the first six months would be higher than that of the second half of 2011, when it was $4.1 billion.

In the first quarter the figure was $1.97 billion, compared with the average in a Reuters poll of 11 banks and brokerages of $1.71 billion.

This was a 15 per cent improvement from the previous quarter and a 24 per cent lower than a year earlier.