ArcelorMittal reported first-quarter profit that more than doubled amid a rally in steel demand that’s seen prices recover across the globe. The shares slumped.
Earnings before interest, taxes, depreciation and amortisation rose to $2.23 billion from $927 million a year earlier, the Luxembourg-based company said in a statement Friday. The figure beat the $2.01 billion average of seven analysts’ estimates compiled by Bloomberg.
The stock retreated 5.2% to 6.85 euros as of 9:52am in Amsterdam. Earlier, the shares fell as much as 7.6%, the biggest intraday drop since June.
Steelmakers have seen their earnings buoyed as prices for the metal trade at the highest in more than two years in key markets such as the US and Europe. The rally has been spurred by rising demand and a curb in record Chinese exports that had dented prices across the globe.
“All parts of the business reported improved Ebitda as steel prices responded to higher raw-material costs and strong volume growth saw steel shipments increase by 5.1% compared with the fourth quarter,” chief executive officer Lakshmi Mittal said in the statement. “We expect market conditions to be broadly stable in the second quarter.”
The outlook for steel has improved in recent months. Excluding China, the world’s top producer and user, global demand probably will rise 2.4% this year, compared with a 0.7% increase in 2016, according to the World Steel Association. There will be gains in big markets such the US and Europe, with bigger rebounds expected in key growth markets such as Brazil and Russia, after multiyear contractions, the industry group predicted.
The US price of hot-rolled coil, a benchmark product, is near the highest in more than two years after rallying 62% in 2016. In Europe, prices jumped 82% last year.
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