ArcelorMittal, the world's largest steel producer, raised its outlook for global steel demand on Thursday, as it expected the Chinese industry to return to growth, but said cheap imports continued to hurt its business.

The group said it expected apparent steel consumption, which takes into account inventory levels, to increase by 2.5 to 3.0 percent globally in 2017 compared to last year, a sharp increase from its previous 0.5 to 1.5 percent estimate.

This increase was driven by a recovery in the Chinese market, the company said, which it had previously expected to decline this year.

While ArcelorMittal has little direct exposure to China, the world's largest steel producing and consuming country has a large impact on global steel markets. Recent economic data from China, suggested its economy was growing quicker than expected, sent Chinese steel futures to a three-and-a-half year high.

For ArcelorMittal as a whole, core profit (EBITDA) rose by 19 percent in the second quarter to $2.11 billion, broadly in line with the $2.14 billion expected in a Reuters poll of nine analysts.

This increase was driven by its European and mining businesses, as core profit in the United States and Brazil was lower than in the same period last year.

The company slightly lowered its market demand forecast for Brazil, which is emerging from long recession exacerbated by a political crisis, as well as for the United States where it sees lower automotive production.

ArcelorMittal said cheap imports, from China and elsewhere, into its main markets were still an issue.

"It remains a matter of concern that we are not able to capture the full benefits of this demand growth due to continued high levels of imports," Chief Executive Lakshmi Mittal said in a statement.

To protect U.S. companies against cheaper steel imports from China, South Korea and others, President Donald Trump said earlier this month he was considering quotas and tariffs.

 

Source:reuters.com

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