MUMBAI, India – Steel demand worldwide is growing slower than forecast, eroding profit at producers including ArcelorMittal and Tata Steel and forcing investors to revise their 2012 outlook for the $430 billion industry.

Global use of the alloy will rise 4.5 percent this year, less than the 5.4 percent forecast in October by the World Steel Association, according to the median estimate of 14 steelmakers, analysts and traders surveyed by Bloomberg. Growth may be as low as 1.2 percent, according to Bloomberg Industries analysts.

The gain, the lowest in three years, is tempered by cooling economies in China and Europe, where orders for steel products for houses, cars and machinery are stagnating and will keep the alloy’s prices and overseas shipments muted, analysts said.

“I’m bearish on Europe’s demand outlook in view of the negative impact from budget deficits and the debt crisis,” said Helen Lau, an analyst with Hong Kong brokerage UOB Kay Hian. “China is maintaining its tightening stance on the private property market and developers are still suffering from tight bank credit and high inventory” of homes.

ArcelorMittal this week may report a profit of $157.6 million in the three months ended Dec. 31, its worst quarterly earnings in a year, according to the mean of five analyst estimates compiled by Bloomberg. Tata Steel, including its European unit, is expected to report a $67 million net income in the same period, according to the average of 23 estimates.