ArcelorMittal, the largest steel producer in the world, has revised its forecast for global steel demand with a sharper decline, which is currently expected in Europe due to a weak automotive market.
British billionaire Lakshmi Mittal's Luxembourg company, which accounts for about 6 percent of global steel production, said on Thursday that it currently expects apparent global steel consumption to rise in the 0.5-1.5 percent range. in 2019 compared to the previous forecast 1 -1.5 percent.
In Europe, according to the company, a decline of 1-2 percent is expected, and there is no hope of expanding demand in the US and Brazil.
Nevertheless, ArcelorMittal's outlook for Chinese demand remains optimistic. Last year, the company produced nearly half of its steel in Europe, with just under 40 percent in its plants in the Americas.
Market conditions were very tough in the first half of this year after a strong 2018, when steel margins declined due to lower steel prices and higher raw material costs, Lakshmi Mittal said in a commentary to the quarterly report. >
“Global overcapacity remains a clear concern,” Mittal said.
ArcelorMittal said its second-quarter EBITDA was $ 1.56 billion, slightly above the consensus of $ 1.53 billion, but up from $ 1.65 billion in the first quarter and only about half as much as a year earlier.
European steelmakers are suffering from a weak manufacturing sector, including a 3 percent drop in new car purchases in Europe. For ArcelorMittal and many other steelmakers, the automotive industry is second only to the construction sector in terms of orders.
ArcelorMittal has suspended operations at a number of factories across Europe, cut production in other regions, and slowed planned production growth at Ilva, Europe's largest steel mill, which was acquired by ArcelorMittal last year.
The South African division of the company also cut more than 2,000 jobs.
ArcelorMittal said the European Commission should take better measures to offset the impact of import tariffs imposed by Washington on incoming steel, which effectively closed the US market.
The company's shares are down 20 percent since the beginning of the year.