Lakshmi Mittal, chairman and main owner of ArcelorMittal, has predicted that world steel demand will pick up by at least 10 per cent next year.

In an optimistic forecast that was in sharp contrast to other top business executives’ more sober predictions, Mr Mittal told the Financial Times on Wednesday: “I feel a lot more cheerful about the prospects for an upturn than I was three months ago.

“The emerging economies are coming out of the downturn reasonably quickly, and in the US and Europe there are signs the [government] stimulus packages are starting to have an effect.”

The head of the world’s biggest steelmaker was speaking after ArcelorMittal said it made a net loss of $792m for the second quarter of 2009.

While warning that an upturn in the steel industry would be “slow and progressive”, Mr Mittal said the expected pick-up in demand next year would be far from negligible.

Changes in the company’s debt covenants to give it more leeway to make relatively low profits – and still be capable of paying back loans – were more of a “protective” device than a sign that the company was expecting the downturn to be prolonged, Mr Mittal said.

He added that next year, world demand for steel outside China could be 10 per cent up on 2009. Inside China – which makes and buys almost half the world’s steel – the rise in consumption was likely to be more than 10 per cent.

“In total I am projecting a good improvement in the position for the steel industry next year compared to 2009,” he said.

He said projections from steel observers about a 15-20 per cent fall in global steel shipments this year compared to 2008 were unduly pessimistic. Steel shipments are a widely followed indicator since the material is used in many key industries.

Mr Mittal thought it unlikely that world steel demand would reach the levels of late 2007 and early 2008 until the end of 2011.

He said consumption trends in India, Brazil and China were particularly encouraging: “In India the steelmakers are at 100 per cent of capacity.”

Shares in ArcelorMittal fell 4.4 per cent on Wednesday to €24.20.

The company cheered bankers by saying net debts – $26.7bn at the end of March – had fallen to $22.9bn at the end of June as a result of capital-raising actions and efforts to cut expenses.

The $792m net loss in the second quarter compared with after-tax profits of $5.8bn last time. Sales fell 60 per cent to $15.1bn.

• Tata Steel, India’s largest private steelmaker, reported a larger-than-expected fall in profits for the first quarter, as Indian steel prices dropped sharply from a year ago.

Tata said that net profits were down 47 per cent at Rs7.9bn ($163m) in the quarter ended on 30 June, compared with Rs14.9bn the previous year. Total incomes were down to Rs55.5bn from Rs61.70bn, in spite of a 30.51 per cent rise in output at 1.54m tonnes from 1.18m tonnes last year.

The Indian steelmaker, which is saddled with debt after acquiring Corus in 2007, raised $500m on Tuesday, by selling global depositary receipts in London.

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