ArcelorMittal plans to shut down a blast furnace at its plant in Eisenhüttenstadt, Germany temporarily due to the decline in demand for steel. The move should help support the declining prices of steel in the open market. ArcelorMittal, the world’s largest steel manufacturing company, was formed in 2006 by the merger of two steel giants (Arcelor and Mittal). The company competes with other international steel manufacturing companies like BaoSteel, POSCO, Nippon Steel, Tata Steel and U.S. Steel.
ArcelorMittal officials said that during the seasonal slowdown in the demand for steel, it has cut production at certain locations in order to optimize the production flows and to align the production capacities to demand. During the first half of 2011 industrial steel buyers restocked their inventory, leading to an increase in the demand for the metal.
In order to match this demand, steel manufacturers had to increase their output accordingly. However, as the restocking cycle came to an end, demand declined creating an oversupply of steel in the market. This resulted in a decline in the spot price. Accordingly, the companies have been slowing production to maintain a balance between the supply and demand of steel.
Leave a Reply