Despite Q3 profits up 48 %, ArcelorMittal warns of sluggish demand in Q4
26 Oct 2010
ArcelorMittal, the $65 billion Luxembourg- based steel company, today posted a 48-per cent increase in third-quarter profit on sales of $21 billion, but warned that Q4 will see demand slacken due to expected higher input prices.
Sales at the world's largest steelmaker increased 30 per cent to $21.04 billion in the third quarter from $16.17 billion a year earlier, while net profit rose to $1.35 billion from $910 million a year earlier.
The 3Q results were marginally lower that what analysts had expected compared to the 2Q results where demand had been sluggish due to growth slowing down in China as well as in the US.
"In the third quarter the business performed towards the lower end of our expectations against a background of seasonally lower volumes, weakening spot prices and higher costs," said Lakshmi Mittal, the CEO of ArcelorMittal.
"Our outlook for the fourth quarter remains cautious as the expected higher input prices continue to work through the business and demand remains muted, though with some regional differences," he added.
Steelmakers had to put up with new quarterly iron ore contracts from the big three iron ore miners beginning April, with an increased iron ore price by over 20 per cent. Demand in countries like China slackened after Beijing ended incentives for buying new cars and reined in runaway construction of new houses.
