The ratings on Luxembourg-registered steel group ArcelorMittal reflect our view of the group's satisfactory business risk profile and intermediate financial risk profile. Supportive factors include the group's leading global market positions, partial supply of own raw materials, and good supply discipline. Constraining factors include industry cyclicality; volatile input costs, profitability, and cash flow; and substantial adjusted debt. In our view, the prospects for further improvement in ArcelorMittal's operating results and credit metrics are more uncertain. The recovery that had been evident in steel markets in the first half of 2010 appears to us to have stalled, and, together with intense margin pressures from higher-cost raw materials, we believe steelmakers face a squeeze on margins and only a muted outlook for
