ArcelorMittal trimmed its forecast for global steel demand to the lower end of an earlier range and said sales in its key European market will contract more than previously expected. The worlds biggest steelmaker now sees global demand rising 0.5 per cent to 1 per cent this year, from an earlier prediction for as much as 1.5 per cent growth.
The company made the prediction as it reported third-quarter earnings that beat expectations, although earnings before interest, taxes, depreciation and amortization were 61 per cent lower than a year earlier. Key Insights in Europe, demand is expected to contract by up to 3 percent, with ongoing automotive demand weakness and slowing construction exacerbated by supply chain destocking.
The company also cut its expectation for the US, and now sees a contraction of 0.5 percent to 1 per cent, from flat to slight growth previously. While the global steel industry is struggling as trade disputes hurt manufacturing, European producers have been hardest hit. A combination of lower sales to automakers and competition against cheaper imports has left the regions steel industry in crisis.
As the largest producer, ArcelorMittal’s forecasts and insights are closely watched. Yet its not the only one that sees deepening weakness in Europe — regional lobby group Eurofer last month said EU demand would sink 3.1 per cent this year, the most since 2012.
ArcelorMittal has responded to the crisis by cutting production and said in August it could sell as much as $2 billion in non-core assets over the next two years to lower debt. The company said on Thursday its making progress on those efforts and has also lowered its capital spending plans this year.