September 08, 2008

ArcelorMittal upbeat on steel prospects

FT reported that Mr LN Mittal president & CEO of ArcelorMittal gave an upbeat view of the steel industry’s prospects for next year after reporting a 12% YoY increase in underlying profits for the third quarter. Mr Mittal added that “The steel industry will have a strong year in 2008.”

Mr Mittal expects that prices for many steel products would rise, partly because of strong demand and partly because of price rises already in the pipeline for raw materials such as coal and iron ore.

Mr Mittal shrugged off the impact on the steel industry of the severe strains in credit markets that have lowered the confidence of many investors in the banking sector. He told FT that “What we have seen is more a banking and subprime lending crisis with its roots in the US, rather than something that will have broader effects. In the US we have seen signs of a softening in demand for steel and this is something we take very seriously.” He added that however, even in the US, it was possible to see some positive aspects for steel companies.

Mr Mittal said that “The weaker dollar means that importing into the US is less attractive. This is good for US based producers which are then in a better position to keep prices reasonably high.”