ArcelorMittal Announces More Cuts to European Production

Geert van Poelvoorde, CEO, ArcelorMittal Europe – Flat Products, said: “This is 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. In the meantime, our employees remain our utmost priority, and we are doing everything we can to ensure that the right social measures are in place to support them and their families during this difficult time.”

Wednesday’s announcement follows a May 6 decision to temporarily idle production at the company’s steelmaking facilities in Kraków, Poland, and to reduce production in Asturias, Spain.

The planned ramp-up of shipments to six million metric tons annually at ArcelorMittal Italia will be slowed down, favoring cost optimization over volume in the current environment.

Analysts at KeyBanc Capital Markets say other steel producers may follow suit. “We expect other steel producers, in Europe and globally, could more aggressively curb supply as global finished carbon sheet steel pricing falls below marginal production cost,” said analyst Phil Gibbs in a note to clients.

ArcelorMittal Steel production in Europe totaled 45 million metric tons in 2018. KeyBanc expects that production for 2019 could fall to the low to mid single digits.