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(Bloomberg) — ArcelorMittal SA said government support for domestic steelmakers in the US and Europe is boosting prices, but warned of potential disruptions from global trade uncertainty.
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That could lead to lower steel demand than the company — the world’s biggest steelmaker outside China — guided for in February, ArcelorMittal said in a statement on Wednesday.
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“Looking ahead, a measure of caution about the short-term outlook is appropriate,” Chief Executive Officer Aditya Mittal said in the statement. “Heightened uncertainty around the terms of global trade is hurting business confidence and risks causing further economic disruption if not quickly resolved.”
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A wave of cheap supplies from China has pushed down prices in recent years, although they’ve rallied back somewhat in the first quarter, as the country pledges to cut production.
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It’s unclear whether the expanding trade war will ultimately benefit or harm the business. ArcelorMittal has significant material flows from its Canada and Mexico operations into the US, where steel imports are now subject to a 25% tariff, although higher prices may offset this. Tougher safeguards in Europe and India could also potentially boost earnings in those regions.
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Earlier this month, the European Union said it would delay for 90 days the implementation of its counter tariffs against the US in response to the levies imposed its steel and aluminum exports. However, the bloc cautioned the measures will snap into place if negotiations don’t yield satisfactory results.
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The steelmaker’s earnings came in slightly above analyst expectations, helped by a strong performance by its iron ore mining operation.
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