ArcelorMittal cuts outlook as ore prices hit mining

BRUSSELS Fri Aug 1, 2014 1:30pm IST

Operators work on a coil of steel at the ArcelorMittal Factory in Florange, Eastern France, October 18, 2013. REUTERS/Vincent Kessler/Files

Operators work on a coil of steel at the ArcelorMittal Factory in Florange, Eastern France, October 18, 2013.

Credit: Reuters/Vincent Kessler/Files

Related Topics

Stocks

   

BRUSSELS (Reuters) - ArcelorMittal (ISPA.AS), the world's largest steelmaker, cut its forecast for earnings this year after lower than anticipated iron ore prices ate into the profit of its mining business.

The company, which makes about 6 percent of world steel and is a broad gauge for the health of global manufacturing, said it now expected core profit to be above $7 billion, having previously given a figure of about $8 billion for the full year.

ArcelorMittal, more than double the size of its nearest rival, nevertheless said its steel business was faring well and that it had increased demand forecasts for Europe and the United States, which account for about two-thirds of its shipments.

The company retained its forecast that global steel consumption would rise by between 3.0 and 3.5 percent, with slightly lower growth in China, now a modest decline seen in Brazil and a drop for Russia and surrounding states.

Russia only takes up about 2 percent of ArcelorMittal's steel, but its weakness removes a source of expected growth.

The International Monetary Fund last week slashed its global economic growth forecast and said geopolitical risks from crises in the Middle East and Ukraine could dent growth further.

ArcelorMittal also sells less than 2 percent of its steel in China, but the country is both the world's largest steel producer and consumer, and growth there has supported both steel and iron ore prices.

ArcelorMittal said it had adjusted its assumption for iron ore prices to $105 per tonne from $120 per tonne before and implying a second-half average of $100.

The company reported second-quarter core profit (EBITDA) of $1.76 billion, below the average $1.83 billion expectation in a Reuters poll of brokers. Last year, the figure was $1.70 billion.

Overall for steel, demand from automakers is good, with EU car registrations up 6.5 percent in the first half. The construction sector, which uses about half of the world's steel, is gradually improving.

(Reporting By Philip Blenkinsop; editing Robert-Jan Bartunek)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Drug Pricing

REUTERS SHOWCASE

 G20 Meet

G20 Meet

As G20 chases growth goal, members differ on how to get there   Full Article 

Modi Speaks

Modi Speaks

PM Modi says al Qaeda will fail in India - CNN.  Full Article 

Alibaba Listing

Alibaba Listing

Alibaba surges on massive demand in trading debut  Full Article 

Importing Rice

Importing Rice

Top rice exporter India importing over 100,000 T on temporary supply squeeze.  Full Article 

GSK Fined

GSK Fined

China hands drugmaker GSK record $489 mln fine, sentences executives.  Full Article 

HMT in Demand

HMT in Demand

Fans rush to HMT as watchmaker marks time.  Full Article 

Apple Not Cool?

Apple Not Cool?

Some consumers say Apple is losing its "cool" factor  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage