By Javi West Larrañaga
April 30 (Reuters) - ArcelorMittal, the world's second-largest steelmaker, reported stronger-than-expected core earnings on Thursday, helped by higher steel prices and improved performance in its North America business.
The Luxembourg-based company posted first-quarter core earnings of $1.68 billion, beating analysts' average estimate of $1.65 billion, according to data compiled by LSEG.
"The fundamentals of the business have improved over the past three months, driven in particular
by the favourable structural reset in the European policy environment," CEO Aditya Mittal said in the earnings statement.
Performance in the first quarter was resilient despite the "unsettled backdrop" in the Middle East, he added.
EU STEELMAKERS SET FOR RECOVERY
Though demand is still below 2022 levels, the steel sector is set for a recovery as prices in the European Union have grown faster than expected in recent months due to the European Union's policy changes and higher energy prices.
After years of low prices, the European Commission's levy on high-carbon goods and a new trade policy to halve imports into the bloc - set to come into place from July - were among the factors that have pushed prices of European hot rolled coil about 22% higher in the past six months.
Lower imports will lead to higher capacity utilization, restoring profitability and returns on capital to healthy, sustainable levels, ArcelorMittal said, as the company prepares to restart idled blast furnaces in France and Poland.
The first-quarter performance did not yet reflect the materially improved pricing environment, the company said, adding those benefits were expected to start rolling in from the second quarter of 2026.
Analysts expect EU steelmakers to have passed higher energy costs on to customers. They are also benefiting from clients increasingly buying from domestic producers to prevent supply chain disruptions associated with the Middle East war.
(Reporting by Javi West Larrañaga in Gdansk, editing by Milla Nissi-Prussak)
