ArcelorMittal SA (ADR) (NYSE: MT) has reported the net profit of $1.21 billion in the third quarter of FY 17, almost doubling the prior year result of $680 million and exceeding an analyst consensus from FactSet of $770 million. The sales grew more than 21% to $17.08 billion from $14.52 billion a year earlier. The company was able to increase local sales due to the implementation of the safeguard measures aimed at limiting steel imports. Therefore, the local sales grew 6% in the third quarter, mainly due to higher local demand for flat steel products after the government implemented import duties on hot-rolled coil products. The stock sentiment is strong today, which rose over 5% on November 10th, 2017 (as of 9:43AM EST; Source: Google finance) The Export sales grew 48.5%, with flat steel products increasing by 22,000 tonnes and long steel products by 44,000 tonnes. The steel shipments were up 6.9% at 21.7 million metric tons, while the iron ore shipments has increased 8.1% to 15 million metric tons. The company also has booked a foreign exchange gain of $132 million, compared with a $223 million loss a year earlier. Income tax expenses fell $75 million on the year. The company also raised concerns about the costs of electricity and rail, which would affect the viability of some its plants. MT’s steady performance during the third quarter is due to the recovery taking hold in the global steel sector, after a sharp collapse in prices for the grey metal two years ago triggered by oversupply that hit producers hard in many countries. This had dragged MT into large losses and forced the company to tap shareholders for capital last year. MT has also unveiled a plan aimed at boosting its core profits by $3bn by 2020, through a mixture of cost-cutting, increased production and a focus on higher-value forms of steel. Despite the improving market conditions, the industry expert say that a global surplus of steel factories, particularly in China, still poses a threat to the health of the wider industry. The US and the European Union have imposed a number of trade tariffs on steel imports from China and other countries that are deemed to be dumped, meaning sold below the cost of production or domestic market prices. The EU regulators this week has opened a full-scale investigation into whether ArcelorMittal’s proposed €1.8bn acquisition of Europe’s largest steel plant, Ilva in Italy, will reduce competition. ArcelorMittal stock has fallen 58.4% in the last six months (source: Google Finance).

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