September 08, 2008

Mr Mittal bullish on global steel scenario

Mr LN Mittal president & CEO of ArcelorMittal in an exclusive interview with CNBC-TV18’s said that emerging markets and economies still continue to be strong but he feels that there could be a ripple effect of a US recession.

Mr Mittal said that “It is true that there is a concern about the US entering into a recession. There is a pessimist feeling within the American businessman. At the same time, I see less concern in the rest of the world. Europeans are not as pessimistic as the Americans are. If you look at emerging markets and emerging economies, they still continue to be strong. This morning, the Chinese GDP growth for the fourth quarter came down to 11.2% from 11.4%. It is not worrying for emerging markets. There could be a ripple effect of a US recession. But the year generally looks positive to me. However, there is concern on the financial sector. There are some structural issues, which need to be corrected. I am sure with Fed’s intervention the banking industry and the financial sectors would correct themselves.”

He added that “The landscape of the steel industry has changed and it is much stronger and healthier, financially as well as structurally. There has been a lot of consolidation in the steel industry. We are seeing steel growth of about 3% to 4% on a global basis, which is strong growth. All the emerging markets and developing markets are strong. The demand is very strong in those markets and even in the Europe and the US, where we see a stable steel environment. However, we are always threatened by the increasing cost of raw material and the energy cost, iron ore and coal. This will increase the cost of steel and the steel industry will necessarily pass on cost increase on the customers.”