The world's second-biggest steelmaker ArcelorMittal expects global consumption of steel products to decline this year due to Russia's military operation in Ukraine, which is slowing down the recovery of the global economy after the pandemic.
Steel demand - a key barometer of global economic growth - will fall by more than a percentage point this year, the company said in a statement on Thursday. Before the war, ArcelorMittal stated that consumption would remain stable or increase slightly in 2022.
“We currently expect apparent steel consumption to decrease slightly this year compared to 2021,” said ArcelorMittal CEO Aditya Mittal. “However, it is clear that the long-term fundamental outlook for steel is positive.”
A bleaker outlook for steel consumption came after the International Monetary Fund cut its global growth forecast last month. Consumption in Ukraine and Russia will fall significantly, demand in Europe will also suffer. Demand in China will shrink to the lower end of the company's previous forecast as the Covid-19 lockdown limits production.
As Europe's largest steelmaker, ArcelorMittal continued to post strong earnings in the first quarter, with earnings before interest, taxes, depreciation and amortization of $5.08 billion, beating analysts' expectations. The company's net income grew by 80% to $4.13 billion in the quarter.
Record steel prices helped metallurgists cope with a serious increase in the cost of energy and raw materials. Steel shipments fell 2.7% in the first quarter, mainly due to the impact of the war in Ukraine, the company said. ArcelorMittal also said it had "temporarily suspended" a pellet plant project in the country.