The world's biggest steel producer, ArcelorMittal, has narrowed its first-quarter loss and expressed cautious optimism about improving steel markets hit by Chinese excess capacity and a global slump in steel demand.
Unveiling results for the first quarter, the Indian steelmaker said it had been able to reduce its net losses between January and March to $416 million (364.3 million euros), compared with $728 million in the same period last year.
Struggling amid falling iron ore prices and cheap Chinese steel imports, the industry leader said its quarterly results "reflect the very tough operating conditions in the second half of 2015."
ArcelorMittal chairman and chief executive Lakshmi Mittal said in the report the company was currently experiencing a "recovery in spreads in our core markets to more sustainable levels," which it considered as a sign of improving business in the next few quarters.
"This is a welcome development, although given the levels of excess capacity in China the market remains fragile and we must continue to be vigilant and active against the threat of unfair trade," he warned at the same time.
Low growth amid steel glut
China's drive in the past two decades to build up its steel industry has led to massive global overcapacity in recent years, resulting in falling prices and accusations that China sheds its subsidized steel on global markets. In addition, steel demand has slumped globally as economies around the world have been cooling.
European steelmakers have been especially hard hit by cheap imports from Chinese rivals, spurring a number of national governments to press Brussels to erect barriers against Chinese steel imports.
However, ArcelorMittal achieved an increase of 8.8 percent in steel shipments to 21.5 million tons in the first quarter. The positive development made the company confirm its core-profit target of more than $4.5 billion for the full year of 2016.
uhe/cjc (AFP, Reuters, dpa)