Shares in the world's largest steelmaker, ArcelorMittal, sink five per cent in early trade despite a more positive outlook - while in the UK, management buyout group Excalibur is due to meet lenders to put together a purchase offer for Tata's UK assets. Hayley Platt reports.
ArcelorMittal says things are looking up - if only slightly. The world's largest steelmaker sees consumption flat or up just slightly on last year. It's cut its forecast for Brazil But raised its outlook for demand from China - the world's biggest consumer of steel - if also its biggest producer. (SOUNDBITE) (English) IG, MARKET STRATEGIST, JASPER LAWLER, SAYING: "There's just a hope that eventually global commodity prices recover and steel participates in that. There is some signs there has been state job losses in China and they are trying to address that oversupply but I don't think that it's in the Chinese government's interest at the moment to stop that flood of steel coming out of the country." But Arcelor shares were down nearly five per cent on what were seen as conservative estimates. It repeated its 2016 guidance for core profit of above $4.5 billion - but Q1 core profits were down by about a third. And it said working capital would need to increase if the steel market were to improve. (SOUNDBITE) (English) RABOBANK, SENIOR CURRENCY STRATEGIST, JANE FOLEY, SAYING: "There is a lot of hope in the market that in the second half of this year we'll come to a more settled place with respect to the balance between supply and demand. But clearly the market is still sensitive to issues concerning oversupply." Arcelor's improved outlook comes as Tata Steel seeks a buyer for its UK operations. The management buyout group Excalibur Steel says it's meeting bankers to seek financing for a deal - in a rival purchase offer to Sanjeev Gupta's Liberty House group. Excalibur says it could mean the loss of around 1,000 UK jobs. ///