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ArcelorMittal sees iron ore hit, lower steel growth in 2015
[BRUSSELS] ArcelorMittal, the world's largest producer of steel, forecast on Friday its profit would fall in 2015, rather than improve as expected, as iron ore prices sapped mining earnings and steel market growth cooled from last year.
The group, an important indicator for the health of the global economy, said global steel consumption would grow by between 1.5 and 2 percent in 2015, a slowdown from expansion of about 2.5 per cent last year.
ArcelorMittal was especially bearish about the United States, its second largest market, where it saw steel demand decreasing by up to 1 percent.
ArcelorMittal said core profit from its mining business more than halved in the fourth quarter to US$232 million, from US$582 million in the same period last year.
After falling 47 per cent last year, iron ore prices have dropped a further 13 per cent so far in 2015 amid a glut, as large low-cost miners lifted output to ship more to China, where steel consumption shrank last year for the first time since 1981.
ArcelorMittal said a third of the lower iron ore prices would be offset by reduced costs and higher volumes. However, it also said that it would not hit its 84 million tonne per year iron ore target in Liberia this year due to the ebola outbreak.
The company, which makes about 6 per cent of global steel, said it expected to reach a core profit of between US$6.5 and US$7.0 billion in 2015, well below the US$7.2 billion in 2014.
A Reuters poll of 11 analysts had on average expected core profit to grow to US$7.4 billion in 2015.