ArcelorMittal, the world's largest steelmaker, cut its demand forecast for its key markets on Thursday and said it was facing the twin challenges of lower steel prices and reduced consumption in Europe.
The Luxembourg-based company, which makes around 6 percent of the world's steel, announced on Monday that it was temporarily reducing European steel output by 3 million tonnes on an annualised basis due to weak demand and increased imports.
"Our first quarter results reflect the challenging operating environment the industry has faced in recent months." Chief Executive Officer Lakshmi Mittal said in a statement.
The company reported a first-quarter core profit (EBITDA) of $1.65 billion, a 34-percent decline from a year earlier and below the company-compiled consensus of $1.68 billion.
Profitability, Mittal said, had been hit by lower steel pricing due to weaker economic activity and global overcapacity, as well as from rising raw materials costs.
ArcelorMittal increased its growth forecast for 2019 global apparent steel consumption, which also reflects changes in inventory levels, to 1.0-1.5 percent from its February guidance of 0.5-1.0 percent.
However, the major change was its more bullish view of China, the world's largest steel consumer and producer, but where ArcelorMittal almost has no business.
Nearly half of ArcelorMittal's steel is produced in Europe, with just under 40 percent in the Americas.
Excluding China, growth this year would be 1.0-2.0 percent, down a percentage point from ArcelorMittal's earlier view. It now sees contraction in Europe and has a more moderate view of expansion in Brazil.
It left its growth forecasts for the United States and the former countries of the Soviet Union unchanged.