ArcelorMittal upbeat about 2018 after strong third quarter
BRUSSELS (Reuters) - ArcelorMittal (>> ArcelorMittal), the world's largest producer of steel on Friday reported a better-than-expected core profit in the third quarter and said it was upbeat about 2018.
Core profit rose by 1.4 percent in the third quarter to $1.92 billion, above the $1.86 billion average expectation in a Reuters poll of 10 analysts.
"Operating conditions continue to improve, with key indicators including the ArcelorMittal weighted PMI implying a positive outlook for 2018," Chief Executive Lakshmi Mittal said in a statement, referring to the purchase manager index, an indicator of economic health, weighted according to the company's steel shipments.
The group repeated its forecast for global apparent steel consumption, which takes into account inventory levels, to increase by 2.5 to 3.0 percent in 2017 compared to last year.
The group said it shipped more steel in the quarter in all regions, except for Europe but even there the fall was less than the usual seasonal decline towards the end of the year.
Earlier this week, Austria's Voestalpine (>> voestalpine AG) also said it was optimistic about the first half of 2018, citing a recovering car industry.
Because of the improved market conditions, ArcelorMittal said it would now invest $2.0 billion in working capital in 2017, compared with a previous forecast of $1.5 billion.
Nevertheless, ArcelorMittal said the market was still impacted by cheap imports from other regions such as China.
"While pleased with the progress that we are making, we operate in a competitive global environment which is characterized by overcapacity and high levels of imports," Mittal said.
China's overcapacity is larger than the combined annual steel output of Europe, the United States and Japan, although import duties have limited Chinese producers' capacity to export.
The utilisation rate at steel mill blast furnaces across China fell last week to the lowest level since at least 2012, data showed.
(Reporting by Robert-Jan Bartunek; editing by Philip Blenkinsop)