ArcelorMittal, the biggest steel producer in the world, saw first quarter profits fall by a third as the price slump in commodities continued to affect its bottom line.
Revenues in Q1 were $13.4 billion (£9.3 billion), massively down from $17.1 billion (£11.8 billion) in the same period last year. Earnings before tax fell to $927 million (£640 million) from $1.38 billion (£950 million) the year before.
Despite the slump, the company narrowed its net losses, which were $416 million (£287 million) from $728 million (£502 million) in Q1 of 2015.
Lakshmi N. Mittal, ArcelorMittal’s Chairman and CEO, said the results reflected tough operating conditions thanks to China:
“We have seen a recovery in spreads in our core markets to more sustainable levels, which is expected to result in improved results in the coming quarters. This is a welcome development, although given the levels of excess capacity in China the market remains fragile and we must continue to be vigilant and active against the threat of unfair trade.”
The report added that while Arcelor while expected steel demand to decline due to weakness in the real estate sector, it also thought prices would stabilise to 2015 levels due to “an end to destocking.”
As Business Insider previously reported, Luxembourg-based Arcelor has been stung by China exporting a record amount of steel to combat its slowing economy.
China made more steel than every other country combined last year, according to the Wall Street Journal, forcing EU and US governments to impose import tariffs. But it’s still hasn’t been enough to curb falling prices in the regions.
Tata steel, Europe’s second largest steel producer, said it planned to sell off its British assets last March in response to Chinese competition, while in April US Senator Ron Wyden accused China of “distorting” the markets and suppressing steel prices.
ArcelorMittal shares fell 3.6% on the news, dropping to €4.52 a share as of 8:50 AM GMT:
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