Shares in the world's biggest steelmaker rose 3% to trade beyond €25 early in the European session before sliding back, amid falling European markets, to €24.88, up 2.3% on their Thursday close.
Third quarter earnings came in at $1.92 billion, up 1.5% year-on-year and about 3% ahead of analyst expectations, driven by stronger than expected results in European markets, where the traditional autumn dip in steel shipments was less pronounced than expected at negative 3.3%.
Shares were also buoyed by a bullish outlook from Arcelor Mittal Chairman and CEO Lakshmi Mittal. "Operating conditions continue to improve, with key indicators including the ArcelorMittal weighted PMI implying a positive outlook for 2018," said Mittal, whose family owns a controlling stake in the steel company.
ArcelorMittal said it shipped more steel in all its major regions, except Europe. Brazil proved the highlight of the quarter, with steel shipments up 12.1%, enabling Ebitda to remain steady despite pressure on margins, while a 4.3% increase in shipments in the NAFTA region helped limit the dip in that region's EBITDA to 24.7%.
ArcelorMittal said improving market conditions had prompted it to increase its investment in working capital to $2 billion, up from earlier guidance of $1.5 billion.
"Overall we view the results as a small positive," wrote Goldman Sachs analysts. "Market conditions into Q4 are described as favourable with steal spreads remaining healthy."
ArcelorMittal's upbeat assessment of the market reflected comments from rival Voestalpine AG, which said Wednesday that it expected sales and earnings to rise in the first half of next year on growing demand out of Brazil and strong automotive sales.
ArcelorMittal reiterated earlier steel consumption forecasts, tipping U.S. steel shipments to increase 2% to 3% over 2017, compared to a year earlier. Brazilian steel shipments should rise 2.5% to 3.5%, EU shipments by 0.5% to 1.5%. Global steel shipments are forecast to rise by 2.5% to 3%.
Despite the general bullishness Mittal's CEO also signaled a warning that pricing remained largely beyond his company's control and that the global steel environment was "characterized by overcapacity and high levels of imports."
ArcelorMittal, like its European and U.S. rivals, has long lamented a lack of consolidation in the highly competitive market for steel, which leaves producers with little control over pricing. Western producers also face the constant threat of cheap imports from China, where the domestic market is massively oversupplied.
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