NRI steel tycoon Lakshmi N Mittal-led ArcelorMittal on Wednesday announced cuts to production at several of its plants across Europe, citing market weakness and high import levels in the region.
The world's largest steelmaker said it will reduce primary steelmaking production at its facilities in Dunkirk, France, and Eisenhuttenstadt, Germany, to align its production to the current market demand.
"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," said Geert van Poelvoorde, CEO, ArcelorMittal Europe Flat Products.
"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," he said.
As part of the proposed cuts, the company also plans to reduce primary steelmaking production at its facility in Bremen, Germany, in the fourth quarter of this year, where a planned blast furnace stoppage for repair works will be extended. It will also mean an extension to the stoppage planned in the fourth quarter of this year to repair a blast furnace at the ArcelorMittal plant in Asturias, Spain.
This latest round of cuts comes after May 6, when the steelmaker had announced its intention to temporarily idle production at its steelmaking facilities in Krakow, Poland, and reduce production in Asturias, Spain. The announcement also impacted the planned increase of shipments at ArcelorMittal Italia to a 6 million tonne annual run-rate.
"The planned increase will be slowed down following a decision to optimise cost and quality over volume in the current environment," the company said.
The production cuts come as the steel industry in Europe continues to struggle in the face of falling regional consumption in the wake of the 2008 financial crisis. In the UK, British Steel formerly owned by Tata Steel collapsed last week endangering thousands of jobs.
Tata Steel was also in the news earlier this month when German steelmaker Thyssenkrupp announced that it expects the European Union (EU) to reject its proposed joint venture with the Indian steel major over competitiveness concerns.
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