Despite posting losses in its December quarter, steel maker ArcelorMittal has projected a better year for the industry in 2011.
Compared to a profit of $135 billion a year earlier, the world’s biggest steel producer reported a net loss of $780 million (£484 million) for the last three months of 2010.
Increasing global commodities price have raised the input costs of its raw material like coking coal and iron ores, putting pressure on its margins.
However, rising steel prices are improving the situation for the industry, the company said. Production volume will also pick up in the first quarter of 2011 as “the gradual underlying demand recovery continues and market sentiment improves”, it added.
The company had spun-off its stainless steel making unit Aperam last month, for which it had to take a one time charge of $598 million in the fourth quarter.
However, sales for the period rose to $20.7 billion from $17.43 billion, reported in 2009. Net profit for the full year however jumped to $2.92 billion from $157 million in 2009.
The company has projected a growth in its capacity utilization to 76% for 2011 from 69% in 2010. The company also plans to increase its iron ore production by 10% for the year.