* Q2 core profit $1.56 bln vs consensus $1.53 bln
* Net debt down $1 bln in Q2 to $10.2 bln
* Cuts steel outlook for Europe, U.S. and Brazil
* Eyes up to $2 bln of asset sales in next 2 years (Updates with shares, CFO)
BRUSSELS, Aug 1 (Reuters) - The world's biggest steelmaker ArcelorMittal cut its forecast for global steel demand, with a sharper reduction now envisaged in Europe due to a lean automotive market.
The Luxembourg-based company did cut its net debt in the second quarter in results that were broadly in line with expectations and said it had identified up to $2 billion of assets for potential sale in the next two years.
ArcelorMittal shares, which had fallen 20% in the year to date before Thursday, were up 1.5% in early trading. Analysts said the company's positive cash flow in difficult circumstances and asset sale plans explained the rise.
The steelmaker, which accounts for about 6% of world steel production, said it now expected global apparent steel consumption, which includes inventory changes, to rise between 0.5% and 1.5% in 2019, from a previous forecast of 1%-1.5%.
It said Europe would see a decline of between 1% and 2%, having previously forecast a contraction of up to 1%, and also trimmed its expansion hopes for the United States and Brazil.
However, ArcelorMittal's outlook for China demand remained bright. The company produced almost half its steel last year in Europe, with just under 40% from plants in the Americas. Its business in China is negligible.
Chief Financial Officer Aditya Mittal told a conference call the industry had seen a downturn since October, after an otherwise strong 2018, the speed and extent of which had surprised the company.
Steel profitability had been squeezed due to lower steel prices and higher raw material costs, this only partially offset by the company's mining operations.
There were signs of improving prices in the United States, Mittal said, but not in Europe, where the spread between steel prices and raw material costs was at its lowest level since the start of 2009.
The company reported a second-quarter core profit (EBITDA) of $1.56 billion, slightly above its compiled consensus of $1.53 billion, but down from $1.65 billion in the first quarter and only about half its earnings of a year earlier.
Net debt declined by $1 billion in the April-June period to $10.2 billion towards a target of $7 billion.
European steelmakers are suffering from a weak manufacturing sector, including a 3% decline in new car purchases in Europe. For ArcelorMittal, and many other steelmakers, the automotive industry is second only to the construction sector in terms of steel sales.
ArcelorMittal has idled a series of plants across Europe, cut production in others and slowed a planned ramp-up of production at Ilva, Europe's largest steel plant that was acquired by ArcelorMittal last year.
Mittal said it was looking at further cost savings initiatives, such as reducing the working week and contractor costs and less expensive raw materials.
The company's South African arm has also cut more than 2,000 jobs.
ArcelorMittal said the European Commission needed to take more effective measures to offset the impact of import tariffs imposed by Washington on incoming steel, which has effectively closed the U.S. market.
The Commission is currently reviewing its "safeguard" measures designed to limit incoming steel and prevent a surge of imports as a result of Washington's 25% import tariffs, which have effectively closed the U.S. market.
ArcelorMittal says the safeguard quotas, which have been increased by 5% twice this year, have not been effective. (Reporting by Philip Blenkinsop, Editing by Sherry Jacob-Phillips and David Evans)