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, narrowly beating analysts' average estimate of $1.65 billion, according to data compiled by LSEG.

However, results at ArcelorMittal's ?Europe business and mining unit fell below J.P. Morgan's estimates, the brokerage ?said in a note to investors.

J.P. Morgan also said the ?company's market value did not "adequately discount potential negative impacts arising from higher global ?energy prices", such as higher costs of production, demand destruction and risks to global ?growth, and lowered its recommendation for the stock to "underweight".

ArcelorMittal's shares fell up to 3.7% at market open, but quickly reversed course to trade marginally higher by 0752 GMT.

HIGHER PRICES, BUT ?DEMAND SUFFERS

Although the war in the Middle East may have unexpectedly improved EU steelmakers' ?competitiveness against their more exposed Asian peers, higher inflation and a spike in energy prices have ‌also ?led to weaker steel demand. 

The World Steel Association in April trimmed its 2026 forecast for steel demand in the European Union and Britain from 3.2% to 1.3%.

Still, the company's performance was resilient in the first quarter despite the "unsettled backdrop" in the ?Middle East, CEO ?Aditya Mittal said ?in the statement.

The business fundamentals have also improved over the past three months thanks to the structural reset in the ?EU policy environment, he added.

Though demand is still below 2022 ?levels, European ?hot rolled coil prices have increased about 22% in the past six months, reflecting higher energy costs and the first effects of the bloc's safeguard measures, after years of ?low ?prices.

The first-quarter performance did not yet reflect the ?materially improved pricing environment, ArcelorMittal said, adding those benefits were expected to start rolling in from the ?second quarter of 2026. 

Source: Reuters 

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