ArcelorMittal, the world's largest steelmaker, reported higher profit than expected in the third quarter, boosted by increasing iron ore shipments and cost savings, and declared it was through the bottom of the cycle.
The company, which makes some 6-7 percent of global steel and is double the size of its nearest rival, said core profit (EBITDA) in the normally weaker second half would be at least equal to that of the first.
It said an improvement in underlying profitability this year was driven by a 1-2 percent increase in steel shipments, a 20 percent rise in iron ore shipments sold at market prices and gains from its variety of cost saving plans.
"Although operating conditions remain challenging, as economic indicators are improving we are cautiously optimistic about prospects for 2014," Chief Executive Lakshmi Mittal said in a statement.
Core profit in the third quarter came in at $1.71 billion, an 18.5 percent increase from a year earlier and marginally higher than the traditionally stronger second quarter. The average expectation in a Reuters poll of 9 analysts was $1.56 billion.
ArcelorMittal did make an overall net loss, of $193 million, for a fifth consecutive quarter.
The company repeated its forecast that core profit for the whole of 2013 would be greater than $6.5 billion, with net debt decreasing to about $17 billion from $17.8 billion at the end of the third quarter.
ArcelorMittal forecast that global apparent steel consumption, which includes changes to inventories, would rise by about 3.5 percent this year. It had previously forecast a 3 percent increase.
The change was due to a revision of its growth forecast for China, the world's largest steel producer and consumer, with expansion of 6.5-7.5 percent now seen, from 4.5-5.5 percent before.
However, it also trimmed its forecast for U.S. steel consumption to between flat and a 1 percent decline, from between flat and 1 percent growth before.
The company produces some 44 percent of its crude steel in Europe and 39 percent in the Americas. (Reporting By Philip Blenkinsop; editing by Robert-Jan Bartunek)