ArcelorMittal Lowers EU, North America Steel Demand Forecast

By Alex MacDonald

LONDON--ArcelorMittal (MT), the world's largest steelmaker by volume, lowered its 2013 steel demand growth forecast in North America and the European Union but raised its steel demand growth forecast in China, resulting in a largely unchanged global demand growth forecast for this year.

The steelmaker said it still expects global steel demand to grow by 3% this year after rising 1.7% in 2012. China, the world's largest steel producer and consumer, is now forecast to see apparent steel demand grow by 5% this year compared with a previous forecast in May of 4% growth.

The Luxembourg-based company said that even though underlying steel demand remains robust in China, steel production is forecast to fall in the second half of the year as infrastructure investment growth slows during the period and into 2014.

Global apparent steel demand growth, excluding China, was revised down to 2% from 3%. This was largely due to downward revisions to steel demand forecasts in the EU and North America.

Steel demand in the EU's 27 member states is forecast to shrink by 2.5% this year compared with a previous forecast of 1.5%, while steel demand in the countries that make up the North American Free Trade Agreement, or Nafta, is forecast to grow by 1% instead of 2.5%.

ArcelorMittal said construction in developed countries remains low. It added that U.S. residential construction is improving but European construction remains depressed.

ArcelorMittal lowered its 2013 earnings before interest, taxes, depreciation and amortization, or Ebitda, guidance to "greater than $6.5 billion" from more than $7.1 billion Thursday, primarily due to lower than expected steel demand in North America and Europe, two of its key markets, and lower-than-forecast prices for the steelmaking raw materials that it sells.

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