* Q4 EBITDA $1.66 bln vs $1.59 bln expected
* Expects Chinese steel demand to fall by up to 1 pct in 2017
* To increase 2017 capex to $2.9bln from $2.4bln in 2016 (Adds details on market outlook)
By Robert-Jan Bartunek
BRUSSELS, Feb 10 (Reuters) - ArcelorMittal, the world's largest steelmaker, said it was bullish on demand in the United States and Brazil but cautious on China after reporting higher-than-expected core profit for the final quarter of the year.
ArcelorMittal said it expected apparent steel consumption, which takes into account inventory changes, for the market to rise by up to 4 percent in the United States and in Brazil in 2017, after declines last year, while Chinese demand was seen declining by as much as 1 percent.
While ArcelorMittal has little direct exposure to China, the world's largest producer and consumer of steel is crucial to the global industry as a whole.
After recent interest rate hikes by the Chinese central bank, investors worried it could slow a construction boom and depress steel demand and prices. ArcelorMittal said weakness in real estate would be partly offset by infrastructure and automotive end markets.
Brazil, an important market for ArcelorMittal which has suffered from an economic slowdown and a political crisis, was expected to grow by up to 4 percent in 2017 after a 13-13.5 percent decline last year, though the company said it saw high household debt and weak investment holding down growth.
ArcelorMittal's core profit rose by more than half in the fourth quarter to $1.66 billion, above the $1.59 billion expected in a Reuters poll of 18 analysts.
ArcelorMittal said the improvement in core profit was caused by improved costs, partly offset by lower steel prices.
The group said it would invest more in capital expenditures in 2017, about $2.9 billion from $2.4 billion in 2016.
Net debt stood at $11.1 billion, down from $15.7 billion at the end of 2015. ArcelorMittal said this was its lowest debt level since the creation of the company a decade ago.
As expected by the market, ArcelorMittal said it would not pay a dividend for 2016, preferring to use surplus cash to reduce debt. (Reporting by Robert-Jan Bartunek; editing by Philip Blenkinsop)