ArcelorMittal's share price fell sharply on Tuesday morning in the wake of a downgrade by Deutsche Bank, which said it was concerned about steel demand.

At around 10:30 a.m., the steelmaker's share price fell by more than 6%, making it the second biggest drop on the pan-European STOXX 600 index.

In a research note, Deutsche Bank points out that ArcelorMittal's share price has recovered well from last year's slump, thanks to its exit from Kazakhstan and the implementation of share buybacks.

Nevertheless, the research firm points to sluggish demand in many of the group's strategic markets, with weak industrial activity in China continuing to weigh on both the steel and iron ore sectors.

The analyst, who has consequently lowered his earnings forecasts for the group, has downgraded his recommendation from 'buy' to 'hold', with a price target reduced from 31 to 29 euros.

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