ArcelorMittal to cut back production in Europe by three million tonne

jueves, 09 de mayo de 2019 | Trading

KOLKATA: ArcelorMittal on Monday announced its decision to cut back production in Europe by three million tonne due to weak demand situation compounded by high energy costs and increased imports.

he company said in an official statement it intended to "temporarily idle production at its steelmaking facilities in Kraków, Poland and reduce production in Asturias, Spain," In addition, it will also slow down the planned increase of shipments at ArcelorMittal Italia to a six million tonne per year. It said the decision was prompted by a need to optimise cost and quality over volume in the given environment.

"Together, these actions will result in a temporary annualised production reduction of around three million tonnes," the statement added.

Commenting on the development, Geert van Poelvoorde, CEO, ArcelorMittal Europe – Flat Products, said: “The difficult decision to temporarily reduce our European primary flat steel production has not been taken lightly. We understand the impact this has on employees and the local communities and will be working to ensure social measures are in place to support them during this period.

These actions reflect the weak demand environment in Europe today, he said adding that the situation was further compounded 'by increased imports despite the safeguard measures introduced by the European Commission.' "High energy costs and increasing carbon costs are adding to the tough environment," he said.

“We are engaging with stakeholders to request that the safeguards are strengthened to prevent a further increase in imports as a result of continued global overcapacity and a weakening economy in neighbouring countries including Turkey. We will also continue to make our case for a green border adjustment to be introduced to ensure that imports into Europe face the same carbon costs as producers in Europe, the statement said.

"The steel industry in Europe can have a strong future but there must be a level playing field to ensure that an unfair advantage is not given to competitors outside the region,” the official added.

In Kraków, the primary production (blast furnace and steel plant) will be temporarily idled. The Polish steel market has been particularly hard hit, due to a near fourfold year-on-year increase in Russian steel imports in 2018, and among the highest electricity prices in Europe.

In Asturias, primary production will be reduced. "Electricity costs are also very high in Spain, and the southern European market has been hit by an unprecedented rise in imports from outside the EU," according to the statement.

Despite the introduction of the permanent EU safeguard tariffs in February 2019 there has been a consistent rise in flat steel imports into Europe.

It is currently at record highs, with imports of hot rolled coil up 37% this year from 2017, on an annualised basis. In addition, the price of carbon has risen by approximately 230% since the start of 2018, placing further competitive pressure on European steelmakers. In the EU Emissions Trading System (ETS), only steel produced in Europe is subject to a carbon levy.


Source: India Times