STEEL giant ArcelorMittal said muted demand for steel will continue to the end of the year, following a weak third quarter for the firm.
ArcelorMittal, the world’s largest steelmaker, also warned yesterday that government austerity measures and energy conservation plans continue to hit global steel production.
“Clearly this is the big news of this call, how the demand remains muted into the fourth quarter of this year,” chief financial officer Aditya Mittal said yesterday on a conference call.
ArcelorMittal said pre-tax profit for the three months to 30 September was $1.35bn (£851m)?compared to $910m in the same quarter of 2009. Sales rose to $21bn from $16.17bn last year.
The firm said underlying earnings will be between $1.5bn and $1.9bn over the next three months, on the back of a drop in average steel selling prices. This would be a 25 per cent fall on the third quarter, and lower than consensus estimates of $2.4bn.
“While we are confident that the underlying recovery is real and will continue, uncertainty has meant that demand conditions are tough,” said chairman and chief executive Lakshmi Mittal.
He added that states should step in to kickstart the world economy: “I still don’t see any really positive trends in the world economy and I think this provides some evidence that further action by governments is necessary.”
Mittal also said government plans to reduce energy consumption have also dented production, with the company estimates putting the likely impact at 20m tonnes of steel, or three per cent of total output.
FAST FACTS | arcelormittal
Founded by Lakshmi Mittal in 1994, the firm is now the world’s largest steelmaker, making up six per cent of global production.
The company has branches working on iron ore mining, real estate and car manufacturing.
CHAIRMAN AND CHIEF EXECUTIVE
LAKSHMI Mittal answered the age-old question of what to buy the man who has everything in April, when he spent £16m on a 400-foot high, bright red steel sculpture named Orbit. Mittal, chief executive and chairman of ArcelorMittal and the UK’s richest man for the last five years, funded the artwork to commemorate the 2012 London Olympics.
Mittal has little else to spend his money on – he already owns Britain’s most expensive house (having paid Formula 1 boss Bernie Ecclestone £70m for the 12-bedroom property in 2003), a 20 per cent stake in QPR football club, and the world’s biggest steelmaker.
Since branching out from the family business in 1994, Mittal has steadily bought up steel plants around the world, culminating in a £22bn merger with Luxembourg-based steelmaker Arcelor in 2006. His son Aditya, aged 34, is the firm’s chief financial officer.
Before the recession, Mittal was the third richest man in the world, behind Microsoft’s Bill Gates and hedge fund tycoon Warren Buffett. Though tumbling steel prices knocked billions off his fortune, he has nevertheless spent five years at the top of the Sunday Times UK Rich List, which estimated his personal wealth in March at £22.45bn.