ArcelorMittal, which makes between 6 and 7 percent of global steel, said customers were increasingly cautious due to economic uncertainties, such as the risk of recession in developed markets and policy tightening in China leading to slower growth.
Chief Financial Officer Aditya Mittal said steel shipments would be ‘marginally’ lower in the fourth quarter than the third, but added there was some downside risk.
Prices had also fallen, with customers waiting for possible further weakness and not keen to build inventories, he said, although stock levels were not high. Weaker prices for raw materials such as iron ore had also put pressure on steel.
ArcelorMittal shares fell as much as 6.3 percent to a two-week low in early trading, but then rising hopes that Greece will abandon a referendum on a euro zone bailout and a rate cut from the European Central Bank caused a general market rebound.
Ingo Schachel of Commerzbank said it was clearly lagging other steel stocks, such as ThyssenKrupp or Voestalpine — up 5.4 and 6.8 percent respectively.
“The steel sector is among the most reactive to newsflow about the economy... ArcelorMittal is still underperforming even if it has recovered,” he said.
The Luxembourg-based firm forecast global steel consumption growth to slow to 5 percent next year from 7 percent in 2011.
Chief Executive Lakshmi Mittal said developed world steel consumption should experience zero to low growth, rather than a 2009-style collapse.
China, the world’s top consumer and producer of steel, had also resorted to output cuts, he said, meaning the market should not be flooded with its exports as has happened in the past.
The Luxembourg-based company said its core profit (EBITDA) fell 29 percent in the third quarter from the second to $2.41 billion, at the bottom of its previous guided range.
It said it had postponed steel expansion at two sites in Brazil and that it had cut its capital expenditure in 2011 to some $5 billion from $5.5 billion. Next year capex would be at a similar or lower level with mining capex maintained.
The company last week dropped a joint $5 billion bid with Peabody for Macarthur Coal after high acceptance sent the price up for an asset that ArcelorMittal would not control.
“We would rather deploy that capital in our own mining business,” Aditya Mittal said.
ArcelorMittal in September launched a plan to focus production at its lowest cost steel plants aimed at boosting annual EBITDA by $1 billion by the end of 2012.
It intends to close steel facilities in Liege, Belgium, and has temporarily idled blast furnaces in France, Germany and Poland as well as arc furnaces in Luxembourg and Spain.
