Steel giant ArcelorMittal believes that the US and European steel markets will not return to pre-crisis levels next year, although developing countries should drive growth.
"Markets are not expected to normalize in Europe and the US in 2010," said ArcelorMittal CEO Lakshmi Mittal in a presentation on the company's web site to be made to investors simultaneously in London and New York later on Wednesday, which is the company's investor day.
According to Mr. Mittal, the emerging world and China were equally important and will represent nearly 80 percent of the global market in 2009. Domestic demand in China is set to increase by more than 15 percent this year, but is expected to cool in 2010, although it will still grow, said the ArcelorMittal chairman, adding that he had previously forecast 10 percent growth for China this year.
Meanwhile, Mr. Mittal also previously forecast a 15-20 percent decline in global demand for steel, recognized as a broad gauge of economic health. Post-crisis, he said he saw demand returning to a three to five percent growth trend, driven by emerging markets.
On the other hand, ArcelorMittal said today in a written statement that it will disclose new targets for certain balance sheet ratios in light of current economic conditions.
During its annual investor day, the company will disclose new targets for a gearing ratio, or net debt to equity ratio, of 25 percent to 40 percent, and a net debt to earnings before interest, taxes, depreciation and amortization ratio, or net debt to EBITDA ratio, of 0.5 to 1.8.
"The company believes these targets are sensible in light of current economic conditions and underline its commitment to maintaining a solid investment grade rating," the company statement reads.