ArcelorMittal Slides Even After Reporting Profit Doubled

Elizabeth Williams
May 14, 2017

There may also be some profit taking as investors crystallize past year gains of nearly 70% in ArcelorMittal and 20% in Thyssenkrupp.

Compared to the first quarter of 2016, ArcelorMittal increased sales and core profit in all of its markets, with the sharpest increase in Europe.

Production of crude steel inched up from 21.8 million tonnes to 23.6 million tonnes in the three months to March 31st.

Looking ahead, ArcelorMittal expected market conditions "to be broadly stable in the second quarter", the CEO continued. Global demand for steel, excluding China, is expected to climb 2.4% over 2017, compared to 0.7% past year, according to the World Steel Association.

First-quarter sales were $16.1 billion compared to $13.4 billion, prior year.

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Earnings after steel shipments grew by 5.1 percent to 21.2 million tons and iron ore prices shot up by 21 percent.

Fellow steelmaker Thyssenkrupp (OTCPK:TKAMY, OTCPK:TYEKF) also reported pleasing results, and boosted full-year earnings guidance. Generating negative free cash flow would negate some of the debt reductions that these companies have completed in recent quarters. It more than doubled its quarterly profit from the $403 million in made in the fourth quarter of previous year.

ArcelorMittal, which expects steel demand in Brazil to rise by up to 4 percent this year, added that the increased profit there was due to higher selling prices and despite lower shipments.

Our mining segment benefitted from an increase in iron-ore shipped at market prices as well as the higher raw material price environment.

"The raw materials markets and as a result our materials businesses are subject to large swings that are beyond our control".

Other reports by VgToday

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