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Metal Recycling News March 06, 2012 06:44:04 AM

ArcelorMittal: Europe flat steel consumption to decline 1-2% in 2012

Paul Ploumis
ScrapMonster Author
ArcelorMittal SA (Euronext: MT, NYSE: MT, BMAD: MTS, LuxSE: MT), the world's largest steel producing company, expects the Europe's flat steel consumption to decline 1-2% in 2012 as buyers turned cautious since the second half of 2011.

LUXEMBOURG (Scrap Monster): ArcelorMittal SA (Euronext: MT, NYSE: MT, BMAD: MTS, LuxSE: MT), the world's largest steel producing company, expects the Europe's flat steel consumption to decline 1-2% in 2012 as buyers turned cautious since the second half of 2011.

Company's Flat Carbon Europe unit is operating about two-thirds of its blast furnaces following a fall to 77% in the European consumption ratio based on total hot rolling capacity in 2011, from 95% in 2007, according to a company presentation at the Handelsblatt Stahl Markt 2012 conference in Dusseldorf.

Jean-Martin Van der Hoeven, chief marketing officer of ArcelorMittal Flat Carbon Europe, said that “A third of the blast furnaces "are idle as demand is simply not there. Some are temporarily idled while some are definitely idled which is the case of Liege."

According to the company, it's furnaces and rolling mills in Belgium, France, Germany, Spain and Poland have reduced operations since the summer of 2011 to better match the lower order flow.

It added that as the euro recently traded back above the $1.30 level, the currency's strength was pushing up costs and limiting export opportunities for European steelmakers to lessen the impact of softening demand from Europe.

"The euro is still at a high level, which hits the competitiveness of the European industry," ArcelorMittal's presentation said.

German steel federation WV Stahl expects the country's crude steel output to fall slightly in 2012 to 44 million mt, down from 44.3 million mt in 2011, and 5 million mt below 2007 levels. Germany is the biggest steel producer in Europe excluding Russia.

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