LUXEMBOURG, May 25: The financial impact of the US decision to impose tariffs on steel will be less than might be expected, the chief financial officer of Arcelor the world’s largest steel company, said on Saturday.

Michel Wurth, Arcelor CFO, told reporters at a conference here that generally-speaking market conditions were not “too bad” but that the fourth quarter and 2003 would be more of a test.

The United States imposed duties of 30 per cent on steel imports in March, angering a host of US trade partners, including the European Union.

“The financial consequences will be much less important than what could have been anticipated,” he said.

“The economic impact is not so important for us. I’d say it was more important for the US steel consumer than the European producer.”

Prices for steel in the United States, the world’s biggest consumer, are now a third higher than in January this year.

Asked if there would be job cuts as a result of the tariffs, Wurth said he did not envisage redundancies.

Giving his outlook for economic conditions he said: “The overall market situation is more mitigated but I cannot say it’s bad. The true challenge will be the fourth quarter and 2003...but there is likely to be positive growth rather than recession.”

Arcelor is the offspring of the recent three-way merger between Usinor of France, Aceralia in Spain and Arbed of Luxembourg.

The steel market in Europe, which boasts some of the world’s biggest producers such as ThyssenKrupp AG or Arcelor, has been slowly recovering this year, causing several companies to raise their sales prices.

Peter Fish, managing director of UK-based steel consultancy MEPS, said earlier this month fears the European market would be flooded with steel from other countries whose US markets had been denied to them had proven unfounded.

This was because exporters had taken advantage of the higher prices in the US to sell their metal there, thus depriving the EU of some supply and pushing up domestic prices.

“Some of the people exporting to the EU, that weren’t traditional suppliers to the States, have decided that the (US) prices are so good that ‘why sell to Europe when you can sell to the US?”’ Fish said.—Reuters