Steel crisis: World's largest steelmaker ArcelorMittal taps investors for $3bn

 
Jessica Morris
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ArcelorMittal said Chinese exports are depressing prices (Source: Getty)

The world's largest steelmaker has been forced to ask its investors for a $3bn (£2bn), as it suffers from the Chinese industry's overcapacity which is blames for driving down steel prices.

ArcelorMittal, which is based in Luxembourg, reported core profit dropped 32 per cent last year to $5.2bn and warned the result this year would only be "in excess of" $4.5 billion as it sees little improvement in overall global demand for steel this year.

Chief Executive Lakshmi Mittal said that 2015 had been a very difficult year for the steel and mining industries even with some higher demand in Europe and the United States, where the company does the bulk of its business, due to Chinese exports depressing prices.

"Although demand in our core markets remained strong, prices deteriorated significantly during the year as a result of excess capacity in China," Lakshmi Mittal said.

ArcelorMittal's share price has dropped 60 per cent over the last 12 months, reducing the group's market value to just €6.2bn. Its share were down 6.13 per cent to €3.46 in mid-morning trade.

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