ArcelorMittal, the world's largest steelmaker, forecast a faster than expected recovery in demand and prices at the start of 2011 after a margin squeeze in the fourth quarter. The Luxembourg-based company, which makes 6%-7% of the world's steel, said on Tuesday core profit would improve in the first quarter by more than the market consensus, following an unexpected net loss in the final three months of 2010.
ArcelorMittal, the largest steel maker of the world, on Tuesday reported $780 million net loss in the last quarter of 2010 against $1,109 million net profit in the year-ago period. Net sales, however, rose to $20,699 million vis-a-vis $17,434 million in the October-December quarter of the last year
"The gradual underlying demand recovery continues and we expect 2011 to be stronger than 2010," Chairman and Chief Executive Lakshmi Mittal said in a statement. ArcelorMittal said it expected core profit (EBITDA) to rise to between $2 billion and $2.5 billion in the first quarter after a slump to $1.85 billion in the final quarter of 2010. The market had been expecting a first-quarter figure of $2.15 billion, according to a Reuters poll of seven analysts.
"The gradual underlying demand recovery continues and we expect 2011 to be stronger than 2010," Chairman and Chief Executive Lakshmi Mittal said in a statement. ArcelorMittal said it expected core profit (EBITDA) to rise to between $2 billion and $2.5 billion in the first quarter after a slump to $1.85 billion in the final quarter of 2010. The market had been expecting a first-quarter figure of $2.15 billion, according to a Reuters poll of seven analysts.
The $500 billion steel sector has been caught in a margin squeeze since the middle of 2010, when raw material costs began to steadily increase but steel prices dropped while industry activity as a whole slowed. Steel prices have picked up since mid-November, although their impact is only likely to be felt from the second quarter, given that it typically takes four months for price changes to feed into results. Tuesday's figures were complicated by last month's spin-off of ArcelorMittal's stainless steel business, Aperam, which also reported its results for the first time.
