The increase in demand for steel from China will not exceed 2.5 percent - Lakshmi Mittal

The largest metallurgical company in the World Arselormital suffered serious financial losses in the first quarter of 2013 associated with the ongoing drop in demand for steel in Europe and a drop in prices for iron ore raw materials. This was announced by the head of the company Mr. Lakshmi Mittal at the annual meeting of shareholders, reports Reuters.

“We worked in minus by 0.5 - 1.5 percent, due to the unstable situation in the first quarter. Despite the good start, the total growth turned out to be very weak. Peugeot and Renault reduced their purchases of metal rolling by 20-30 percent,” said the head of Arselormital.

According to Lakshmi Mittal, the European market will begin to show signs of recovery no earlier than the second half of this year. At the same time, the prices for iron ore, the profit from which in 2012 provided a quarter of all income of the company, fell to $ 128 with 157 at the beginning of the quarter.

In addition, Mr. Mittal revised his own forecast for the growth of steel consumption in China, given to him in February this year. Then the head of Arselormital believed that the growth of demand from the Chinese economy would be at least 3 percent, and today he said that he was expecting no more than 2.5 percent of its increase.

Lakshmi Mittal said that the demand from the construction sector has increased slightly, however, tightening the lending conditions that have been observed recently, weakened it.