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Steel giant forecasts rise in demand

Do Not UseDo Not Use 6/05/2016
steelworker © Getty Images steelworker

ArcelorMittal has forecast global demand for steel will stabilise as it reported improved quarterly results.

The world's biggest steel maker said it expected global steel consumption to stabilise this year and either match consumption in 2015 or rise by 0.5%.

It raised its outlook for steel demand in China this year.

Arcelor reported a net loss of $416m (£287m) for the three months to the end of March - in the same period last year it reported a $669m loss.

Arcelor's improved outlook comes as Tata Steel seeks a buyer for its UK operations, which are losing £1m a day.

China watch

Tata has blamed China for depressed steel prices, saying the nation has not cut production in response to falling demand for steel.

While ArcelorMittal does not have exposure to the Chinese market, its position as the world's largest steel producer means its forecasts for steel consumption are closely watched.

In China, it said it expected consumption to either stay the same as last year or fall by around 1%.

But this was an improvement from a previous forecast of a fall in consumption of between 0.5% to 1.5%.

ArcelorMittal kept its earnings forecast for 2016 unchanged.

Tata bids

Earlier this week Tata began examining proposals from two firms who have put in takeover bids for the UK steel operations.

A management buyout team under the name of Excalibur Steel UK Limited and Liberty House, which runs a steelworks in Newport, are interested.

Tata is hoping for a quick sale.

It has contacted 190 potential bidders for the Port Talbot site, which is the biggest in the UK and employs more than 4,000 people.

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