Arcelormittal slashes steel production days after collapse of British Steel
Arcelormittal today slashed its European production for the second time this month as steelmakers face increasing challenges.
The company said it would reduce the amount of steel produced at a plant in France and two in Germany, as market demand remains weak and European customers chose to rely on increased imports.
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It also plans to extend outages at a Spanish plant to repair a blast furnace.
The statement sent shares down 4.2 per cent to €13.53 in the early afternoon.
“This is again a hard decision for us to have taken but given the level of weakness in the market, we feel it is the prudent course of action. This will be a temporary measure that will be reversed when market conditions improve,” said Geert van Poelvoorde, the head of Arcelormittal’s European flat products business.
It comes as European steelmakers face increased pressure, after tariff increases more or less closed off the US market to EU products.
On 6 May Arcelormittal announced it would temporarily stop production at a Spanish and a Polish plant.
And last week British Steel fell into administration. The company exports around four fifths of its products, and was hit by uncertainty around the potential of post-Brexit steel tariffs.
The announcement has endangered 5,000 jobs, mainly in Scunthorpe where the company’s main plant lies.
Yesterday the firm’s receivers revealed that more than 80 potential bidders had emerged for the struggling company.
Read more: DEBATE: Should the government nationalise British Stee
International iron ore prices, a key component of steel, have shot up since the beginning of the year after a burst dam killed hundreds and heavily impacted production in Brazil.
Yesterday, Chinese iron prices hit their highest point since 2013 when the country started spot trading the metal.