ArcelorMittal downgrades demand forecast for European markets
According to the information resource network, the world's largest steel company ArcelorMittal has lowered its demand forecast for major European markets, as the lower steel prices at the beginning of the year squeezed the company's first-quarter profit margin. The company announced that it will temporarily reduce its annual steel production in Europe by 3 million tons due to weak demand and increased imports.
ArcelorMittal announced first-quarter profit before interest, taxes, depreciation, and amortization (EBITDA) of US$1.65 billion, down 34% year-on-year, below the company's expectations of US$1.68 billion. The company's CEO, Lakshmi Mittal, said that due to weak economic activity, global overcapacity and rising raw material costs, steel prices have fallen, which has weakened corporate profitability. ArcelorMittal will increase its forecast for global growth this year, which reflects changes in inventory levels, from 0.5%-1.0% in February to 1.0%-1.5%. The main reason for the increase is that the company is optimistic about the development prospects of the Chinese market. China is the world's largest consumer and producer of steel, but ArcelorMittal's business there is almost blank. Nearly half of ArcelorMittal's steel is produced in Europe and less than 40% in America. ArcelorMittal forecasts a global growth rate of 1.0% to 2.0% this year, excluding China. The company said it remained pessimistic about the outlook for the European market because of weak manufacturing and falling car production in the region, which are the main downstream consumers of the steel industry.
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