ArcelorMittal forecasts slow recovery

ArcelorMittal, the world's top steel maker, said its markets would improve only slowly with higher shipments but lower prices in early 2010, and its profit forecast fell short of market expectations.

The company said yesterday that the industry, a barometer of global economic strength, would see increased demand from key customers such as carmakers and that price rises should have more of an impact in the second quarter.

"The recovery is underway, but is slow and progressive," Chief Financial Officer Aditya Mittal told a conference call, predicting global demand would rise 10 percent this year.

ArcelorMittal, which has about eight per cent of the global market, with output three times greater than nearest rival Nippon Steel, expects core earnings before interest, tax, depreciation and amortisation (Ebitda) between $1.8 billion (Dh6.61bn) and $2.2bn in the first quarter.

The average forecast in a Reuters poll of analysts was for $2.6bn, and compares with a fourth-quarter figure of $2.1bn, itself just short of expectations.

The $500bn steel industry took a heavy beating in the 2008/2009 downturn, with demand from key construction and auto consumers sharply down and destocking magnifying the negative effect.

ArcelorMittal returned to net profit in the third quarter after three consecutive losses.

Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here.

Follow Emirates 24|7 on Google News.