By Anna Peverieri
(Reuters) -ArcelorMittal, the world’s second-largest steelmaker, on Thursday reported third-quarter core profit above market expectations, as improvement in its Brazil business partly offset continued weakness in North America and Europe.
Its shares were up 4.8% by 0844 GMT, on track for their biggest daily increase since December 2023 if the gains hold.
The Luxembourg-based company said its earnings before interest, taxes, depreciation and amortisation (EBITDA) rose to $1.58 billion in the quarter, down 15% from a year earlier but ahead of analysts’ consensus of $1.49 billion.
“Apparent demand is expected to be stronger in the second half of this year compared with 2023, and inventory levels are low, indicating that re-stocking will occur when real demand recovers,” CEO Aditya Mittal said in a statement.
The upbeat comments contrasted with earlier warnings from European peers Outokumpu, SSAB and Acerinox about a weaker fourth quarter and an uncertain demand view.
“Most notable is that ArcelorMittal reiterates guidance for positive free cash flow in 2024 (and beyond),” J.P.Morgan analysts said in a note, adding the 6% EBITDA beat looked solid compared to peers.
“Very high China steel exports remain a depressive force on European Steel prices,” they added.
The steel industry has been suffering from tightening global monetary policy, weaker construction activity in Europe and problems in the real estate sector in China.
Aditya Mittal said the increased imports into Europe was a concern and stronger trade measures were urgently required to address the matter.
Overproduction in China has led to very low domestic steel spreads and aggressive exports, leading to unsustainable market conditions, the company said. Because of this, steel prices in Europe were “well below the marginal cost curve”, it added.
As local consumption remains suppressed by a weakened property sector, China is on track to export more than 100 million metric tons this year, the most since 2016.
Meanwhile in the U.S., high interest rates have dented demand and the risk of market protectionism, which could impact steelmakers exporting goods there, has risen after Donald Trump won Tuesday’s presidential election.
(Reporting by Anna Peverieri in Gdansk; editing by Milla Nissi)
