(Bloomberg) – Arcelormittal SA said government support for domestic steel manufacturers in the U.S. and Europe is raising prices, but warned of potential disruptions in global trade uncertainty.
Arcelormittal said in a statement Wednesday that this could result in lower demand for steel than the company, the world’s largest steel manufacturer outside China, under guidance in February.
“Looking forward, caution about the short-term outlook is appropriate,” CEO Aditya Mittal said in a statement. “Increasing uncertainty surrounding global trade terms are undermining business confidence and risking that, if not resolved quickly, will lead to further economic damage.”
China’s wave of cheap supply has lowered prices in recent years, although they tilted in the first quarter as the country promised to cut production.
It is unclear whether the expanded trade war will ultimately benefit or harm business. Arcelormittal has a large stream of material from its Canadian and Mexico operations to the United States, and despite the higher prices, steel imports are now subject to a 25% tariff, although prices may offset that. In Europe and India, stricter safeguards may also increase income in these regions.
Earlier this month, the EU said it would postpone the U.S. count tariffs on tariffs imposed on its steel and aluminum exports. However, if negotiations do not produce satisfactory results, the group’s warning will bring measures in place.
The steel maker earned slightly higher than analysts’ expectations, thanks to the outstanding performance of its iron ore mining business.
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