ArcelorMittal, the world’s biggest steel maker, posted a 48 percent jump in third-quarter net profit as the global recovery boosted demand for steel.
Net profit rose to $1.35 billion in the third quarter, up from $910 million a year earlier. Sales increased 30 percent to $21.04 billion from $16.17 billion a year earlier.
But earnings were down from the previous quarter, and the company warned of higher raw materials prices and muted demand ahead. Profit was down 21 percent to $1.70 billion from the second quarter, as spot steel prices fell but iron ore prices rose.
Iron ore is one of the key raw materials for steel.
Sales fell from $21.65 billion in the previous three months.
Steel demand is still well below pre-crisis levels, as the construction and automobile sectors are struggling to recover.
In the third quarter, Arcelor’s operations were running at 71 percent of total capacity, down from 78 percent in the previous three months. The Luxembourg-based company attributed the decline to “seasonal slowdown, primarily in Europe.”
Arcelor was cautious in its outlook for the fourth quarter, “as the expected higher input prices continue to work through the business and demand remains muted, though with some regional differences,” Chief Executive Lakshmi N. Mittal said in a statement.
The company said shipments are likely to improve slightly in the final three months of 2010, but average steel prices are expected to decline and capacity utilization will likely remain flat. Costs are also expected to increase, with raw material prices going up further, Arcelor added.
ArcelorMittal, headquartered in Luxembourg, was created in 2006 through the merger of Arcelor and Mittal Steel. In 2009, it was responsible for about 6 percent of the global steel output.
