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(Bloomberg) — ArcelorMittal SA said US tariffs and European support for local steelmakers are 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 forecast earlier this year, ArcelorMittal said in a statement on Wednesday. In February, the top steel producer in the West saw consumption outside China growing by 2.5% to 3.5% this year as customers replenish stockpiles.
In February, President Donald Trump’s administration extended a 25% tariff on steel imports to countries that had previously been exempt, including from Canada and Mexico, which are among the country’s top foreign suppliers. Europe has also strengthened protectionist measures to target a wave of cheap Chinese supply that’s pushed down prices in recent years.
“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.”
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, but tougher safeguards in Europe and India could also potentially boost earnings in those regions.
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.
ArcelorMittal shares fell as much as 2.5% in Amsterdam trading.
The steelmaker’s earnings came in slightly above analyst expectations, helped by a strong performance by its iron ore mining operation. First-quarter earnings before interest, taxes, depreciation and amortization of $1.58 billion beat estimates of $1.56 billion.
(Updates with shares in penultimate paragraph)
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