14 Februari 2008
ArcelorMittal and ThyssenKrupp upbeat about demand this year

LUXEMBOURG Europe's two biggest steelmakers, ArcelorMittal SA and ThyssenKrupp AG, were upbeat about weathering any global downturn this year, saying Wednesday they expected strong steel demand and higher prices to cover soaring costs.

Chinese efforts to hold back cheap steel exports and recent stockpile selloffs in North America and Europe are expected to boost demand, particularly as fastgrowing economies in Asia, Latin America, Russia and eastern Europe call for steel for more buildings, cars and machines.

ArcelorMittal chief executive Lakshmi Mittal said he believed the steel industry was growing "in favorable conditions" especially as his company expands in China, the main driver for global steel demand.

ThyssenKrupp CEO Ekke' hard Schulz said he also expected 2008 to be another good steel year: "The signs for this on the market have been increasing recently," he said.

ArcelorMittalthe world's biggest steel company with 10% of global outputshrugged off a potential U.S. recession, saying developing countries now make up 60% of world demand.

The Chinese market is now four times larger than the U.S. and a 2% increase there would offset an 8% volume decline in the United States, Mittal said.
He welcomed Chinese government moves to reduce exports,close plants that are no longer viable and stoke home supply by cutting sales tax. At the same time Chinese raw material costs are increasing."We are seeing a slowdown in exports from China in the world. This is very good news," he told reporters.

This will allow steelmakers to increase prices in the U.S. and Europe to counter "significant cost pressure" from more expensive coal and iron ore.
China is also driving demand for coal.

ArcelorMittal's kind words for China come as it waits for Beijing's antitrust authority to allow it buy the remaining stake in China Oriental. Efforts to become that company's major shareholder holds out the chance of a coup for a foreign firm moving into a key Chinese industry.

Both ArcelorMittal and ThyssenKrupp reported moderate growth in the final three months of 2007, with a slowing global economy and a scarcity of credit. Steel distributors also quenched demand by selling 'off stocks in the U.S. and the EU.

ArcelorMittal SA reported a net profit increase of 2.7% to US$2.44 billion (1.68 billion), below market expectations of US$2.51 billion (1.73 billion), based on a survey of analysts by Dow Jones Newswires. In 2006, the company reported fourthquarter profit of US$2.37 billion (1.84 billion).

Sales in the three months ended Dec. 31 rose 20% to US$27.99 billion (19.32 billion), compared with US$23.2 billion last year. The final quarter slowdown came after a stellar year when ArcelorMittal saw profits surge 30% to US$10.37 billion (7.56 billion).

Revenue for all of 2007 was US$105.22 billion (76.77 billion), up nearly 20% from a year earlier when Mittal Steel Co. NV won its takeover bid for Arcelor SA, combining the No. 1 and No. 2 steelmakers to create a steel titan.

ThyssenKrupp, the German steelmaker and industrial conglomerate, earned 414 million (US$601.9 million) in the October-December period, down from the 641 million it earned a year earlier. The figure was below the 424 million (US$616.4 million) that analysts polled by Dowjones Newswires had expected.

Sales also slipped slightly to 12.27 billion (US$17.8 billion) in the quarter from 12.33 billion a year earlier. The company said that because of a drop in demand, its order intake fell to 13.27 billion (US$19.3 billion) from 13.30 billion a year earlier.
Shares of ThyssenKrupp were down more than 3.2% to 33.87 (US$49.24) in Frankfurt trading.

The maker of automotive parts, elevators and technology service products said it still intends to post a pretax profit of 3 billion (US$4.4 billion) in its 2008 fiscal year with sales likely to be approximately 53 billion (US$77 billion). (AP)

Source : The Point, Page : 12 

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