29th July, 2010 Source: livemint
ArcelorMittal, the world's largest steel maker, said it is going to increase its prices for steel by 10% this year, even as it expects steel demand to weaken throughout most of the world. The announcement came as the company swung to a net profit in the second quarter on a slow recovery in demand but said the third quarter will be hit by a seasonal dip in demand and economic slowdown in China.
ArcelorMittal to raise steel prices by 10%
livemint
BY DEVON M AYLIE
LONDON
ArcelorMittal, the world's largest steel maker, said it is going to increase its prices for steel by 10% this year, even as it expects steel demand to weaken throughout most of the world.
“We need a 10% price in- crease for spot business in order to replicate our profit level in the second quarter,“ said Chief Executive Lakshmi Mittal.
Mr. Mittal said that so far, the steelmaker has renegotiated some of its automotive con- tracts and successfully pushed through higher costs. “In some cases for the new contracts, we have succeeded on passing our higher raw materials costs over,“ he said.
The announcement came as the company swung to a net profit in the second quarter on a slow recovery in demand but said the third quarter will be hit by a seasonal dip in demand and economic slowdown in China.
The company also said that it's assessing a spin-off of its stainless steel business to add value for its shareholders.
The Luxembourg-based steelmaker posted a net profit of $1.7 billion in the three months ended June 30 after a net loss of $792 million in the year-ago period. A Dow Jones Newswires poll of 14 analysts forecast a net profit of $1.26 billion.
Second quarter earnings be- fore interest, taxes, deprecia- tion and amortization, or Ebit- da, of $3.0 billion was above $1.22 billion a year ago and higher than $1.89 billion in the first quarter.
The Dow Jones Newswires poll had forecast Ebitda of $2.86 billion.
The steelmaker said that in the third quarter, it expects its closely-watched Ebitda to be between $2.1 billion and $2.5 billion.
Second quarter revenue rose to $21.65 billion from $15.2 bil- lion in the same period a year ago.
Keywords:Input prices
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