Arcelor-Mittal posts $1.07b Q4 profit as demand grows

February 11, 2010

Aoife White

The Associated Press
BRUSSELS, Belgium (Feb 11, 2010)

ArcelorMittal SA, the world's largest steel maker, posted a fourth quarter profit of $1.07 billion yesterday and said it expects demand to strengthen this year.

Steel buyers worldwide are set to increase purchases by 10 per cent this year, said Aditya Mittal, the company's chief financial officer, as manufacturers in developed and emerging markets use up excess stocks.

The parent of Hamilton's ArcelorMittal Dofasco has been hit hard by the recent steel slump.

The profit in the last three months of 2009 was higher than a third- quarter profit figure of $903 million and well above a $2.6-billion loss in 2008's fourth quarter. Still, the company made a profit of just $118 million for all of 2009, compared to a $9.4-billion profit a year earlier.

ArcelorMittal says demand is already picking up -- with first quarter shipments outpacing the fourth quarter -- but warned that this will be offset by lower selling prices and higher costs for iron ore and coking coal. Net debt will increase during the first quarter, it warned.

Mittal said the company would hike prices going forward but was still feeling the pain of fulfilling orders made when prices were lower late last year.

He said ArcelorMittal will refocus from paying off debt to investing in its business, seeking growth opportunities in India and Brazil. It has some $4 billion to spend on new projects this year.

Mittal said the company sees demand in developed countries -- the United States, Germany and Japan -- growing 15 per cent from a very low level. Emerging markets such as Brazil will also grow 15 per cent -- except for China, where demand will grow at a steadier 5 per cent.

ArcelorMittal blamed lower selling prices and weak demand for the steel used for cars, machinery and buildings for poor profits last year. Average prices were down by more than a quarter.

ArcelorMittal produced some 6 per cent of world steel in 2009 -- down from its usual 10 per cent.

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Here's a thought:

$4 billion to invest in new projects? What about the investments that still need to be made in current projects? Currently the company has only agreed to invest $12 million in pollution control over the next 5 years at its Hamilton facility. This amount is not sufficient to lower their current exceedance of Benzene and Benzo(a)pyrene, two cancer causing agents which pose health concerns to the Hamilton community...