ArcelorMittal to review its US steel assets to save costs

SPOKANE (Scrap Monster):  ArcelorMittal, the world’s largest steel producer has announced struiter cost cutting measures at its US steelmaking facilities. The company had reported had reported loss of $8 billion during 2015. The company cited low iron ore prices as one of the several causes that led to huge loss during the year.

According to the company, the US operations have already implemented several cost-cutting measures including restricted purchases and revised health care plan for employees. The company is also in efforts to boost performance improvement and implement asset optimization at its steel making facilities. Also, ArcelorMittal plans to idle production at East Chicago facility, in an attempt to streamline its operations.

The company believes that increased level of steel imports from China has impacted the operations at domestic steel mills in the US. Although trade measures adopted by the US and EU authorities are expected to offer some relief, the Chinese steel exports are not expected to drop significantly, mainly on the back of slowdown in that country’s economic growth.

The consolidated steel shipments during the last quarter of 2015 declined almost 6.3% to 19.7 million tonnes. The shipment volumes from company’s NAFTA operations fell drastically during the quarter. The steel shipments from NAFTA region have dropped sharply by 18.5% during the quarter to 4.6 million tonnes. Flat product shipments from the US and Mexico plunged by nearly 20%. Long product shipment volume has dropped by 13%.

Meantime, the company blamed plunging iron prices as one of the reasons for the non-cash impairment charges related to its mining business. The company has focused on several cost-cutting measures throughout the year in order to adapt the business to prevailing tough market conditions. These measures have helped the company to slightly lower its net debt when compared with 2014 levels.