Rising prices and falling demand hit profits at Mittal's global steel empire

Britain's richest man, Lakshmi Mittal, has reported a fall in profits at his multi-billion pound global steel empire due to increased cost prices and reduced demand for his company's products.

ArcelorMittal, which manufactures steel for the automotive, construction and packaging industries, said sales fell to $21 billion (13.3bn) in the third quarter, down 2.8 per cent on the second quarter. At the same time, net income dropped from $1.7bn to $900 million.

The company, which produced 6 per cent of the world's steel output in 2009, said total shipments in the third quarter amounted to 21 million metric tonnes, compared with 22.8 million in the previous three months, which it blamed, in part, on seasonally lower volumes.

The performance of the company is seen as an important bellwether for the global economy because its products are used by a variety of industries.

ArcelorMittal said it was cautious about its prospects in the fourth quarter as its underlying earnings will be squeezed by at least 16 per cent.

Mittal and his family topped the Sunday Times Rich List this year with an estimated wealth of 22.5bn.