UPDATE 2-ArcelorMittal lowers forecast for global steel demand

* Q1 core profit $1.75 bln, in line with forecasts

* Keeps 2014 forecast for core profit (EBITDA) of $8 bln

(Adds CEO comment, more on market outlook)

BRUSSELS, May 9 (Reuters) - ArcelorMittal, the world's largest steelmaker, trimmed its forecast for global steel use on Friday due to a more pronounced slowdown in China and a decline in Russia, though it retained optimism about its core European and U.S. markets.

The company, which makes about 6 percent of the world's steel and is a broad gauge for the health of global manufacturing, said apparent steel consumption, which includes inventory changes, should increase by between 3.0 and 3.5 percent in 2014.

That compared with its previous forecast for growth of between 3.5 and 4 percent and last year's expansion of about 3.5 percent.

ArcelorMittal itself, which sells more than 85 percent of its steel in Europe and the Americas, retained its own forecast that it would report a core profit of some $8.0 billion in 2014, up from $6.9 billion in 2013.

It said this was based on a 3 percent increase in steel shipments, a 15 percent rise in shipments of iron ore, a moderate improvement in steel margins and average ore prices of about $120 per tonne. They had fallen to about $106 by the start of this month.

ArcelorMittal, more than double the size of its nearest rival, reported first-quarter core profit (EBITDA) of $1.75 billion, the same as the average expectation in a Reuters poll of brokers. Last year, the figure was $1.57 billion.

The company said its steel earnings per tonne increased in every segment except North America, which was hit by an extremely cold winter.

Chief Executive Lakshmi Mittal said the year-on-year improvement was the result of recovering steel markets, the expansion of its mining operations and benefits of cost controls.

"The prospects for growth of our core markets in Europe and the U.S. are encouraging and overall we remain cautiously optimistic about the business outlook for the rest of 2014," he said in a statement.

The steelmaker is forecasting a slowdown in consumption growth in China, Brazil and the former Soviet states, accelerated U.S. market expansion of 4 percent and improvement in the European Union after declines in 2012 and 2013.

It is now seeing a Chinese slowdown to between 3.0 and 4.0 percent, from 3.5-4.5 percent before. For the former Soviet states it is seeing a contraction of between 2 percent and zero, from a gain between 1.5 and 2.5 percent.

By contrast, it has raised its forecast for growth in the European Union by 0.5 percentage points to 2-3 percent.

(Reporting by Philip Blenkinsop; editing by Tom Pfeiffer)