UPDATE 5-ArcelorMittal sees slower steel demand in 2nd half
* U.S., European customers taking wait-and see approach
* CEO cites seasonal factors for second half slowing
* Inventories in both regions remain low (Updates with link to second graphic, groups both together)
By Carole Vaporean
NEW YORK, June 22 (Reuters) - ArcelorMittal (ISPA.AS), the world's largest steel maker, said on Tuesday that apparent and real demand for steel remains positive in the second quarter in the United States and Europe, but would be slower in the second half of the year.
"I still believe we will have 10 percent growth in global (steel) demand this year," Lakshmi Mittal, chairman and chief executive of ArcelorMittal, said at American Metal Market's 25th Steel Success Strategies conference.
He added, however, that the geographic distribution will have a different profile than before the global recession.
Before the financial crisis, he said, demand was divided evenly in thirds among developing countries, developed countries and China. Now, however, China consumes 50 percent of global steel, he said.
The CEO added that he did not see total steel demand returning to "pre-crisis" levels until 2012, and that a restructuring of the global industry may be necessary.
Graphic comparing shares of ArcelorMittal and U.S. Steel
Graphic showing iron, steel and U.S. economy
Asked by Reuters about the demand outlook for the second half of 2010, Mittal said he saw it was slowing for seasonal reasons.
"But once you take out the seasonality factor, things will start to improve," he said.
In Europe, "customers are taking a wait-and-see approach. At the same time, inventory levels are still low," Mittal said.
"We are also seeing U.S. customers taking a wait-and-see approach after restocking, but inventory levels are still low there also."
Asked about different customer sectors, Mittal said: "Housing is clearly still weak. Autos are still strong. The capital goods market is starting to improve and engineering is starting to improve."
In response to questions about comments earlier this month that ArcelorMittal was considering halting up to three European blast furnaces in the third quarter [ID:nLDE65214X], Mittal said, "We said we will be producing what our customers want."
He explained that ArcelorMittal had learned during the global econmic downturn how to operate at lower capacity if demand does not pick up.
"This is part of our contingency plan, if demand slows down in the third quarter. We are prepared to shut down our blast furnaces. We have made no decision on that yet. We will decide as the quarter progresses," the CEO said. (Reporting by Carole Vaporean; Editing by Walter Bagley)
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