Steelmakers continue to struggle, cutting production
ArcelorMittal has cut production for the second time in a month, a week after the collapse of British Steel.
ArcelorMittal, the world’s largest steelmaker, has blamed weak demand and high imports for cutting production for the second time this month, Reuters reported on Wednesday.
The latest cuts amount to between one and 1.5 million tonnes of steel per year, and follow annualised production cuts of 3 million tonnes announced on May 6. The company’s shares fell six percent at this news.
Increased steel tariffs have practically closed the United States to exports from Europe, while the European Union is reviewing its “safeguard” measures to protect European steelmakers from exporters such as China dumping cheap steel in its markets.
Geert van Poelvoorde, the head of ArcelorMittal’s flat products division in Europe, said production cuts would be reversed when market conditions improved.
The company cut its forecast for European demand in May, predicting a downturn due to weak manufacturing results and declining car-making.
ArcelorMittal has steelmaking plants in 18 countries worldwide, with 47 percent of its steel produced in Europe. Facilities in Dunkirk, France and Eisenhuettenstadt, Germany will be most affected, Reuters reported, as will plants in Bremen, Germany, and Asturias, Spain.
Meanwhile, British Steel, which collapsed last week, blaming declining European orders amid Britain’s chaotic, planned withdrawal from the European Union, may yet be offered a lifeline.
About 25,000 jobs are at risk in plants and along the supply chain.
The official receiver, appointed to oversee the liquidation of the company’s assets, revealed on Tuesday that more than 60 potential trade purchasers had been sent nondisclosure agreements.
Expressions of interest in buying the company are due by early June.
“The company retains good support from its customers,” a statement from the receiver said.
“All staff have been retained, and continue to be paid.”