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 manufacturers steel for the automotive, construction and packaging industries, reported that sales fell by 2.8 per cent to 13.3 billion in the third quarter compared to the second quarter.

Its net income dropped from £1.1 billion to £570 million in the same period.

The company, which produced six 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 metric tonnes in the previous three months, which it blames in part on seasonally lower volumes.

“In Q3 the business performed towards the lower end of our expectations against a background of seasonally lower volumes, weakening spot prices and higher costs,” said chairman and chief executive officer Mr Mittal.

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.