Is the Steel ETF a Steal?

The world’s largest steelmaker by volume posted better-than-expected third quarter net income on Wednesday, even though the results were well below year-ago levels as demand for steel continues to be weak. Luxembourg-based ArcelorMittal (MT) reported a net profit of $903 million, crushing analyst estimates for a loss of about $50 million. But a significant portion of the profit was attributable to a one-time tax benefit, and EBITDA came in slightly lower than expected by analysts.

Perhaps even more promising for the steel industry is that the company also raised its profit guidance for the fourth quarter, citing higher shipments and average steel prices. Lakshmi Mittal, the company’s chairman and CEO, indicated that clear signs of a recovery can now be seen. “In response to this increased demand, a number of our facilities have now been restarted, and we expect fourth-quarter crude steel capacity utilization to be approximately 70%,” he said. “We should continue to see further gradual improvement through 2010, although the operating environment remains challenging.” ArcelorMittal had been operating at about 60% capacity in the third quarter.