Steel Mills

CRU: ArcelorMittal Ordered To Shut Down Hot Strip Mill in France

June 29, 2023

France’s labor inspectorate has told Luxembourg-headquartered ArcelorMittal to temporarily close the hot end of its Fos-sur-Mer steel works because insufficient protection measures are exposing employees to high levels of toxic products and dust.

The order will lead to the shutdown of the entire site, local media reported. The plant has been the subject of several formal notices from local authorities, and legal complaints for pollution filed by local residents and non-governmental organizations.

ArcelorMittal has launched an action plan to reduce the risk to workers at the 5-million-metric-ton-per-year Fos-sur-Mer mill in southern France. Employees and the social and economic committee have approved the measures.

Collapse in Margins Means Steelmakers May Be Willing To Take Capacity Offline

This shutdown order comes as European steel mill margins have collapsed amid sharp falls in prices over the last couple of months. As such, while it is not being done as a commercially driven decision, the capacity thus removed may not be entirely poorly timed from the perspective of producers.

A recent force majeure at Salzgitter, resulting from flooding, could be viewed in a similar light, although that disruption looks to be of a smaller scale and may already be coming to an end.

That said, there is an offset with ArcelorMittal’s Asturias blast furnace A now due to restart at the end of next week and the company’s Dunkerque furnace also looking to come back online. Without a pickup in buying or an increase in import prices, the net impact on the European market balance may be insufficient to drive an upturn in prices.

This article was originally published by CRU, SMU’s parent company, on June 29.

By CRU research analyst Rosy Finlayson and CRU principal analyst Matthew Watkins