06/05/2016 BBC Business Live

This is Business Live from BBC News with Victoria Fritz

narrows its losses as it largest producer of steel,

of a collapse in worldwide demand for the metal.

Live from London, that's our top story on Friday 6th May.

ArcelorMittal's first-quarter profit dropped 33%, as the world's biggest

steelmaker has contended with slumping prices of the material

the markets where Japanese markets the markets where Japanese markets

have seen investors turning their focus to the closely watched US job

numbers later. I will gather myself to stop

Our Economics Correspondent Andrew Walker will be here to give us stop

the inside track on some of the big business stories of the week,

including the latest on US jobs due out later today.

And time is money as the old saying goes, Facebook has 50 minutes

we want to know from you, do you give them 50 minutes? Let us know.

The world's largest producer of steel, ArcelorMittal,

has posted a 33% fall in profits in its first quarter to $416m.

We'll have more on that in a moment, but the past few years has seen

Here are the reasons why: As you can see from this graph showing one

of the most commonly traded types of steel, rebar,

the price has been hit by oversupply, cheap raw materials

You will just have to trust me. There you are, the red line I was

looking for. China produces half of the world's

steel, more than the United States, the European Union,

Russia and Japan combined. But demand for steel in China has

shrunk for the first time in a generation as economic growth

has slowed and policy makers have tried to steer

the economy toward consumption. Declining sales at home have

seen mills in China ship record volumes overseas,

with China accused of dumping steel on foreign markets,

or selling it for less than it Jason Kaplan is a steel expert

with IHS Purchasing Service. Great to have you in the studio. Can

I stuff, Victoria then with the graphics, making it seems we talk

about the doom and gloom but that little Arctic, what was behind that?

??HOTKEY craziness from China again. Everybody believes there is not

enough stock and they are ordering materials and the first time you can

buy it on an exchange. Not only is this not holding but in fact these

steel mills are suddenly saying, we need more. It is craziness. I guess

there were no surprises with the numbers from ArcelorMittal. When we

look at the oil industry they are falling off a cliff. My own

wandering what of the ones that are doing better than the ones

doing worse are not doing? ArcelorMittal is actually one of the

better ones. The US steel mills are doing considerably worse. Their

success is really about geographic focus on India. One of the stronger

markets. They also go back into iron ore. They are benefiting from

low-cost throughout the supply chain. I want to ask about results

we have seen today, losses narrowing slightly. The net debt in

quarter has actually risen to over $7 billion. This seems to be a real

structural weakness in the entire industry, the whole commodities

sector really. Yes it is. That is the thing that is hampering and

precipitating the Tata Steel demise. ArcelorMittal recently did another

rights issue to keep things going. We have two wrap it up but is still

price bottoming out? We think so. Upwards from now. Good on you.

In other news... News Corp, the media giant

controlled by Rupert Murdoch, has seen revenues fall 7.3%

in the first three months of the year -

amid a decline in advertising sales in the print media.

It's the fifth drop in quarterly revenue in a row and was

It's also been hit by the strong dollar which dented its

News Corp lost $149m in the three months to March -

after a big one-off charge to settle monopoly claims at its in-store

The former owner of UK retailer British Home Stores,

Sir Philip Green, has hit back at the politician responsible

for looking into the collapse of the high street chain.

Sir Phillips says that Frank Field, chairman of the Work

and Pensions committee- should resign.

His comments come after Mr Field recommended stripping the former BHS

owner of his knighthood if he did not repay ?571m

North Korea's ruling Workers' Party will open its first full

Foreign reporters have been allowed in, to witness a display of national

unity, but their movements are closely managed.

Our Korea correspondent, Steve Evans, is among them

That the building behind me, just across the square,

In front of it, you probably can't see it, but there are rows and rows

of buses which have bussed in the delegates.

And right around the perimeter of the building there are men

standing absolutely stock still, all with umbrellas.

And those, we are told, are Kim Jong Un's personal guards.

That is the way you tell he's in there.

If you ask anybody what is going on they say, we don't know.

What we assume is happening is that we are being called

What we assume is happening is that we are being corralled

here while Kim Jong Un is in there speaking and we presume

we will go in and see the remainder of the proceedings.

This thing is important because it is happening.

Technically it is the body which runs North Korea but it is not

Its significance we think is that Kim Jong Un is cementing his hold

on power, it is his way of appearing to the nation,

though it is not currently going out live on TV but no

It is him cementing his position in the nation as the man in charge.

What we don't know is whether there will also be some kind

of policy announcement, a big signal of a change in policy,

perhaps a liberalisation of the economy or something like that.

Stocks in Japan dropped, and the yen strengthened as trading

Caution dominated the mood in other Asian markets ahead

They suffered their worst weekly loss since February.

This is how the trading day is opening up across Europe.

Markets have been open about 40 minutes now.

Italian banks firmly in focus in Europe.

Provisions for bad loans fell to a four year low.

Michelle Fleury in New York has the details on those

Has the US economy gained enough momentum to continue creating jobs

We will find out in a few hours' time.

The US Labor Department releases its latest

Wall St will be watching closely to see how the

data may influence the outcome of June's rate-setting policy meeting.

Economists are predicting 202,000 jobs were created last month, and

the unemployment rate is expected to remain unchanged at 5%.

There are two things particularly to look out for.

The first is the number of Americans searching for work,

also known as the labor participation rate.

The job prospects have improved and that figure has gone up.

The other number to watch is wage growth, which, well, it's been

Richard Jeffrey, Chief Investment Officer

Always good to see you. Thanks for popping by. Let's stay with the US,

not so much about the detail, what about the market focus? Earlier in

the year it seemed like there was not so much focus on the markets, it

was more inflation, salary growth, are the markets focused on these

numbers today? Earlier in the year the markets were looking

internationally because that is what was influencing the Fed. What tends

to happen is that people initially look at the jobless numbers which

hits the headline and then they start to analyse the detail. I think

the detail is the labour cost, the average hourly earnings. I disagree,

I think there is some sign of more wage inflation coming from the

Saints. That is why the markets will be sensitive. That comes into the

reaction function for the Federal reserve, it starts to think about

wage infection picking up solution to warrant interest rates going up.

The markets look forward and we have just had a whole slew of data

surveys coming out from purchasing managers right across the world and

they are fairly uniformly week. We are seeing rhetoric from central

bankers that suggests things are a bit better. Why do we have this

disconnect and who should we trust? You have to be careful about

overanalysing monthly changes in any economic financial series. You love

the purchasing managers surveys but actually I would say rather

the purchasing managers surveys being week I would say they were

dull. World growth is relatively dull but that is safe, when it is

exciting, the stuff you like, it is unsafe cost of going too fast. I

think the numbers are OK at the moment. I would not want to see them

get much weaker but at the moment we are seeing a little volatility, some

a bit weaker than expected, but I think the key is that after a poor

first quarter in the US economy, which was probably related to some

statistical seasonal adjustment problems, I think we will see a

rebound in the second quarter and that is what visual banks are

looking at. You are a glass half full bloke. That is the one. Best to

be that way. You will come back and take us through the papers. Talk to

you shortly. You Still to come: What is the future

You for the Transatlantic Trade Our Economics Correspondent Andrew

Walker will be here to tell us more. You're with Business

Live from BBC News. Despite being surrounded by water,

many people feel the UK doesn't currently make the most

of its natural resources - Mark Shorrock says he's ready

to change that and start building a tidal lagoon in Swansea Bay

which could generate 8% I wonder how much power you think

you can generate. What we can do, this island nation of ours gets a

vast body of water coming out of the Atlantic notion into the Severn

River and Liverpool Bay. -- Advanta Goshen. About eight metres- 12

metres of tidal range, you could get 10% of our electricity by harnessing

a series of tidal lagoons, filling and emptying man-made tidal lagoons

around the coast. How does this around the coast.

alternative energy generator compared to others already in play?

One of the key things is, the way the water flows around Great

Britain, the times change. When you have tidal lagoons in the Severn

estuary, and they are off, tidal lagoons in Liverpool are on. So you

have 24-hour generation, you always know when the tide will be rising

and falling. They are stacked around the country. The big comparisons

with wind and nuclear, but intervals of offshore wind and nuclear, tidal

power will be cheaper than both. In terms of certainty, we know exactly

in any year in the future when we will be generating for how long on

any day. Price-wise we expect tidal power to be the cheapest possible

source of power for the UK. It will last a very long time, if we build a

tidal lagoon in Swansea Bay it will still be there in 120 years. Thank

you for your time, Mark. This sounds fascinating. Did you know, one

quarter of all UK workers not only want to take off for the weekend,

they want out altogether? I am surprised it is just one quarter.

Job satisfaction at the lowest for two years.

People saying they feel very insecure.

This is Business Live. ArcelorMittal's profit for the first

three months of this year dropped 33%, with the slump in prices of the

material, steel prices have gone straight down. Let's get more on the

US jobs numbers, we've them all morning. They are coming

out later today and implement is predicted to rise again and how will

that affect the Federal Reserve's thinking when it comes to setting

rates. One person with some insight into that is Robert Kaplan, the

President of the Federal Reserve bank of Dallas and one of the people

who sits on the big table of the Federal Reserve and

least looks at what direction US interest rates should go and here is

what he has to think. My own view is we know

the consumer's capacity to spend in the United States

is getting stronger. You know, their incomes,

the job market is strong, wealth, home prices,

so then the question is, is it political uncertainty,

is it the financial turmoil Our own judgment is you will

see a rebound at some point in the second

quarter in consumer spending, and we still believe GDP growth

will be 2% this year. Robert Kaplan is optimistic, Andrew,

he is optimistic, reasonably. 2%, remember, in the context of a

disappointing side in terms of disappointing side

economic growth, it is OK, but over the longer period it is not grateful

stop the US's economy long-term trend has been higher than that. Is

he right to expect a rebound? Probably, yes. There is an

expectation of a rebound, Richard mentioned seasonal adjustment

issues, the US economy has had a pattern

first quarter of the year, which raises the question, they do have

the statistical techniques for smoothing out routine seasonal

fluctuations and maybe there is a debate about whether the methods

they are using are no longer up to the task and not capturing what is

going on in the first quarter. Nonetheless, it was a weak figure,

the signs are it will get better in the second quarter. Inters talk

about what is going on with TTIP, the transatlantic trade investment

love it on this programme, will it partnership. We love that! We all

love it on this programme, will it happen, won't it? It has been a

terrible week for the negotiators, first of all we had Greenpeace the

environmental campaign group releasing documents which they

the negotiations and they said it business in what they regard

the negotiations and they said it pointed to their concerns about the

deal leading to lower standards of consumer protection, environmental

protection, health protection and so forth. So that was certainly a bad

start to the week. French officials, including

President Holland himself saying the deal potentially on the table as it

stands would not be accessible -- President Hollande. You could argue

Donald Trump's success is another setback because he has focused his

trade rhetoric on other things, the transpacific partnership, Mexico,

China, but it is a fair bet he would be at least a little sceptical.

There are a lot of people in the states who don't like his trade

deals but I'm along the lines of this is not going to happen, is it?

President Obama wants to get it done before his term is over, the clock

is ticking and the Europeans are not that much in favour anymore. If it

doesn't get pushed before Obama is out, let's be frank, the way it is

looking Donald Trump goes in, it is a done deal, not a done deal, it is

out of I do think we can say that but we

can save Hillary Clinton is also not a huge fan. Regardless of what

happens. There are two questions, they get the legal agreement done

before President Obama steps down, there are quite a lot of technical

issues. Both sides have said they are committed to making the effort

to get it done but both sides say it is important to get the right deal

rather than just any deal by the deadline. Even if it is

be ratified by the US Congress. With whoever is in Congress, with whoever

is in the White House that is going to be really tough. I think perhaps

little over doing it, something I to say it is out of

little over doing it, something I would never normally accuse you of.

Not me! But it is hugely challenging. Hugely challenging.

know another challenge, Greece. It hasn't gone away.

The IMF wants something, they want a lot of things.

The Eurozone finance ministers will have a crack at getting the bailout

were aiming to have a review were aiming to have a review

completed and signed off back in the autumn and that didn't happen

because of concerns about whether Greece was actually complying with

the programme. They will try and get it done on Monday but the IMF was

saying that it wants to have Greece having what they call contingent

measures to reduce its borrowing needs. That's because the IMF is not

at all convinced that the targets that... The measures Greece has

already agreed will achieve the borrowing targets they have in mind.

And they therefore want to have some additional

in automatically if the targets are missed. And it has to be said, the

Greek government is very unhappy about going down that line. And it's

going to be... Talking about the struggle with TTIP, this will be a

that the Eurozone finance ministers back on the rails

that the Eurozone finance ministers are having on Monday. But, of

course, with the referendum on EU membership in June and also the

possible flare-up of the refugee crisis, the last thing Europe needs

is a Greek drama, another crisis. Do you think the European

may be in the mood for compromise? They maybe in the mood for

compromise for precisely one of those reasons. The political

background for the negotiations with Greece is such that you would like

to be just part it for a long period -- like to be able to just park it.

The agreement is between Greece and the International Monetary Fund, the

Eurozone and the IMF, which thinks the targets as currently constituted

commission's gift to do this. are not credible so it is not in

commission's gift to do this. We appreciate your time, have a

lovely weekend. In a moment we will take you through

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.co/ business. On Twitter we are BBC business. Whatever you need to know.

get straight on with the papers. In get straight on with the papers.

the New York Times Mark Zuckerberg has come out and said, those 1.6

billion people who use Facebook regularly every month, give Facebook

15 minutes a day. That is astonishing.

Apparently it is more than measure activity, according to the

bureau of labour statistics, with the exception of watching TV. And

eating. That gets more time, doesn't it? What is interesting is not so

much, crikey, spending 50 units on Facebook, it is that younger people,

anybody younger than you and me, of course! Younger people are spending

much more of their leisure time on things they don't have to pay for.

That is quite interesting in terms of consumer spending, household

spending and those sorts of trends. These things aren't actually free

because they are paid for by advertising so they are paid for

indirectly but consumers don't have to pull money out of their pockets

to contemplate when we look at to contemplate when we look

slightly dull consumer spending trends and they are going on a

different way. We had some tweets. Caleb from my -- Nairobi says 50

minutes is far more than enough. People are getting bored of

Facebook. It doesn't look

recent numbers. After the first flush, the

technology is exciting, but maybe you want more faced time.

I like that, Richard! We are running out of time.

Financial Times, headline, most EU citizens in the UK would not meet

That is absolutely right but the Even more so when the new rules come

That is absolutely right but the Visa rules are set in the context of

the number of people who can come in from the European Union. If there

were tougher restrictions on people coming in from the European Union

Visa rules might be relaxed so have Visa rules might be relaxed

to look at those things in relation to one another. The fact is the UK

has lots of demand for labour and it is sucking in workers and at the

moment most of them come in from the EU.

Richard Jeffrey, we appreciate your time,

have a great weekend. Thank you, Richard.

There will be more business news throughout the day

on the BBC Live webpage and on World Business Report.