By Anna Peverieri and Alban Kacher

(Reuters) -Europe’s top steelmakers showed more resilience than expected in their first-quarter earnings, but warned that global trade tensions, weak European prices and market volatility are clouding the outlook for the rest of the year.

ArcelorMittal, which reported on Wednesday a smaller-than-expected drop in its quarterly core profit, flagged trade disruptions as a risk to its 2025 steel demand forecasts, particularly in the U.S. and China, sending its shares down more than 5%.

“Heightened uncertainty around the terms of global trade is hurting business confidence and risks causing further economic disruption if not quickly resolved,” the CEO of the world’s number two steelmaker Aditya Mittal said, echoing concerns raised by Swedish rival SSAB.

SSAB, which also reported a smaller-than-expected drop in earnings on Tuesday, said the proximity of its facilities to customers, and specialised products helped cushion the immediate impact of new U.S. tariffs, but warned of a “more uncertain than usual” second-quarter outlook in its steel division.

The results of Luxembourg-based steel group Aperam also came slightly above expectations on Wednesday, which it credited to higher volumes in Europe and the contribution from the consolidation of its U.S.-based business.

Aperam, which makes stainless and speciality steels and alloys, operates mainly in the EU and Brazil, and has limited exposure to the U.S. market.

The group warned that pricing pressure would weigh further on its earnings in the second quarter, though it should improve compared to the previous three months’ performance.

However, its admission that it was difficult to provide an outlook for the quarters further ahead sent its shares down in early trading.

“Reliable projections for the remainder of the year are challenging in the current volatile environment,” group CEO Timoteo Di Maulo said.

According to Oddo-BHF analyst Maxime Kogge, second quarter could bring some relief with trade restrictions expected to lift prices, European players further reducing their exposure to China, and restructuring efforts paying off.

However, a mix of high energy costs, competition from cheap Chinese producers and higher tariffs on exports to the United States loom large over the European steel industry at a time when the global market already grapples with excess capacity.

“Global steel excess capacity is expected to continue rising, (…) fuelled by cross-border investments by Chinese steel companies,” the Organisation for Economic Co-operation and Development said in a report earlier this month.