Luxembourg-based ArcelorMittal swung to a profit of $52 million in the second quarter compared with a loss of $780 million in the same period a year earlier. It had not been in the black since the second quarter of 2012, when it earned $959 million.
Since the financial crisis, it has spent $1.4 billion, mostly in Europe, closing mills and reducing its workforce. That process is over. "Asset optimization is done," Chief Executive Officer Lakshmi Mittal said in an interview.
Meanwhile, the U.S. and European economies "are starting to grow again," said Mr. Mittal, highlighting industries such as automotive and construction. The company forecast steel demand would grow more swiftly, by between 5% and 6% in North America, than in China, where demand for the metal is expected to grow between 3% and 3.5%. In Europe, it is expected to grow 3% to 4%.
ArcelorMittal's sales of steel in North America jumped 13.1% compared with a year earlier to $5.4 billion. In Europe, sales declined slightly, but earnings increased by more than 40% to $689 million. "Other than residential and public construction, the market has been strong in the U.S.," said John Packard, publisher of Steel Market Update, an industry pricing and trends report. "Even private commercial construction is starting to get strong."
One part of ArcelorMittal that saw its profits decline was its iron ore mining business, which suffered from an expected decline in average iron ore price to $105 a ton from $135 a ton last year. That caused the company to cut its full-year forecast for earnings before taxes and other costs to "more than $7 billion" from $8 billion.