ArcelorMittal, the world's largest steelmaker, says its two-year slump was over and prospects for 2014 were looking up, after higher US steel shipments and mining output boosted third-quarter profits.
The company, which makes 6-7 per cent of global steel and is a broad gauge for the health of the global manufacturing industry, said it believed it had passed the low point of the economic cycle.
Its profits have been eroded in recent years by the protracted debt crisis in the euro zone and a slowdown in China, the world’s largest producer and consumer of steel.
"The economic indicators do suggest that we are turning a corner and we are cautiously optimistic on the prospects for 2014," chief financial officer Aditya Mittal told a conference call, adding that the firm's own composite index of manufacturing surveys was at a two-year high.
ArcelorMittal, in steel terms double the size of its nearest rival, reported a net loss for the fifth quarter running, this time of $193 million. But core profit (Ebitda) of $1.71 billion was well above the average $1.56 billion forecast in a poll of analysts, and also the first year-on-year increase in two years.
The company repeated its forecast that core profit for 2013 would be more than $6.5 billion, with profit in the normally weaker second half at least equal to that of the first.
It said an improvement in underlying profitability this year would be driven by a 1-2 per cent increase in steel shipments, a 20 per cent rise in iron ore shipments sold at market prices and gains from various cost saving plans.
ArcelorMittal predicted global steel consumption including changes to inventories would rise by about 3.5 per cent this year, up from an earlier forecast of 3 per cent. The rise was due to an acceleration in China to consumption growth of 6.5-7.5 per cent from 4.5-5.5 per cent before.
However, it also trimmed its forecast for US steel consumption to between flat and a 1 per cent decline, from between flat and 1 per cent growth before. This was partly due to destocking and should be positive in the second half, with non-residential construction picking up. – (Reuters)
