Steel giant tumbles into loss

Arcelor has not been hit hard by US steel tariffs

Arcelor, the world's largest steel maker, has posted a heavy net loss, complaining of a 20-year low in steel prices.

But the firm, which was formed last year from a merger of Spain's Aceralia, France's Usinor and Luxembourg's Arbed, said that performance should approve appreciably this year.

Flat carbon steel prices had been rising since April, the firm said, and demand had also improved in the same period.

With three-quarters of its sales in its home European market, Arcelor is only marginally exposed to US steel import tariffs, imposed controversially by President George W Bush in March.

Metal bashing

During the first three months of this year, Arcelor posted a 24m euro (£16m; $23m) net loss, against a 186m euro profit in the first quarter of last year.

Last year's figures are a poor guide, however, since the company did not then exist in its present form.

On an operating basis, the company remained in the black, posting a 65m euro profit.

Arcelor also said that planned cost savings linked to the merger were likely to kick in, but not this year.

The firm is targeting some 700m euros in cost savings from the merger as from 2006.