ArcelorMittal on Thursday said it expects improved profits in the second half of this year, despite the global financial crisis and slump in demand from China.
LONDON: World's largest steel producer ArcelorMittal on Thursday said it expects improved profits in the second half of this year, despite the global financial crisis and slump in demand from China.
"Despite the current financial crisis, the Chinese economic slowdown and the strong destocking taking place in steel markets, we are pleased to expect profitability improvement in the second half of this year," Company's Chairman and Chief Executive Officer Lakshmi N Mittal said in a statement here.
The steel behemoth, which recorded a steel output in excess of 116 million tonnes in the last fiscal, reaffirms third quarter EBITDA guidance in excess of USD 8.5 billion, it said.
"It (ArcelorMittal) expects EBITDA as well as cash flow from operations to be higher in the second half of 2008 compared to the first half of the year," the statement also said.
Demand of the alloy had come down considerably in China, the largest producer of steel with an output of about 450 million tonnes by the end of 2007-08, in the past six months. The country consumed majority of the produce on account of the 29th Olympics Games which concluded in Beijing, recently.
The slump in steel consumption globally got aggravated with the financial turmoil which originated at the Wall Street in the US with steel prices and production witnessing a downturn.
ArcelorMittal had earlier announced cut in production at its various facilities amidst the declining demand and falling prices of the commodity.
Earlier this week, major Chinese steel mills also announced a cut in steel production by up to 20 per cent.
Anglo-Dutch steel giant Corus, part of India's Tata group, also said it would adjust steel production to match the slump in demand.
Meanwhile, Indian steel companies also expect the growth in production of the alloy to dip to 8-9 per cent this year, from the targeted 12-13 per cent. Steel prices in the Indian market has comedown by almost USD 350 dollar per tonne due to the slowdown.
Internationally, steel prices have come down by almost 25 per cent in past couple of months due to the global economic slowdown.
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