ArcelorMittal gives upbeat outlook, beats earnings forecast

11 May 2018

The world’s largest steelmaker ArcelorMittal said the outlook for 2018 had improved after a sharp pick-up in steel prices and increased iron ore shipments helped it deliver higher-than-expected first-quarter earnings on Friday.

The group did not give a specific forecast for its own prospects, but repeated that it saw 2018 global apparent steel consumption, which takes into account inventory changes, growing by between 1.5 and 2.5 percent.

Demand appeared strong, notably in the United States, Europe and Brazil, and the spread between the price of steel and its raw materials was healthy, ArcelorMittal said.

“The outlook for 2018 has strengthened as the year has progressed, with the combination of growing demand and supply-side reform driving higher capacity utilisation rates and healthy steel spreads globally,” Chief Executive Lakshmi Mittal said in a statement.

First-quarter core profit (EBITDA), the figure most closely watched by analysts, rose 13 percent year-on-year to $2.51 billion, above the average $2.33 billion expected in a Reuters poll of 10 analysts.

ArcelorMittal said its average steel selling price was 18.2 percent higher than in the first quarter of 2017, with shipments up 1.4 percent. For iron ore, of which it mines more than 50 million tonnes a year, shipments rose 5.5 percent, while prices were down 13.1 percent.

The firm has been a vocal supporter of trade measures against cheap imports into both the United States and the European Union, where it has the bulk of its operations.

“Comprehensive solution for unfairly trade imports across geographies still required,” ArcelorMittal said in an overview of EU and U.S. measures, including the 25 percent import tariffs imposed since March 23 by U.S. President Donald Trump, with certain temporary exemptions, such as for EU steel.