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ArcelorMittal Cuts Steel Demand Forecast, Beats Profit Expectations

BRUSSELS, July 27 (Reuters) - ArcelorMittal, the world’s second-largest steelmaker, lowered its steel shipments forecast on Thursday for this year, as it reported second-quarter earnings that exceeded expectations.

The group said global steel demand excluding China is expected to grow 1% to 2% this year, down from a previously forecast range of 2-3%, due to higher U.S. interest rates and weak construction activity in Europe.

"We have delivered a strong set of financials in the first half of the year, which reflect the improved market conditions and also the positive impact of recent strategic acquisitions," Aditya Mittal, ArcelorMittal's CEO, said in a statement.

ArcelorMittal shares were up 1.93% to 26.14 euros as of 09:43 a.m. CET (0743 GMT)

"ArcelorMittal has lowered its expectations for global steel consumption to +1%-+2% from +2%-+3%, mainly due to softening of market conditions in the US, Europe and Brazil, but this seems already fairly reflected in FY EBITDA consensus of $7.7 billion, which implies a 25% sequential decline in 2H23," ING analyst Stijn Demeester said in a note.

The Luxembourg-based company reported second-quarter core profit of $2.6 billion, half of the year-ago figure and slightly higher than the average forecast of $2.5 billion in a company poll.

"We remain relatively optimistic on relative steel consumption in our core markets for 2023," Genuino Christino, ArcelorMittal's CFO told reporters. He said uncertainties remained for the rest of year, with a number of challenges ahead.

ArcelorMittal reported a weaker mining performance impacted by lower iron ore production, shipments and higher freight costs. It said inventories remain low in core markets.

Reporting by Marine Strauss Editing by Kim Coghill, David Goodman and Bernadette Baum

Source: Reuters

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