CHALLENGING TIMES FOR STEEL
The global steel sector continues to be subdued on China and eurozone uncertainties. Vera Blei reports.
T
he continued uncertainty from the eurozone debt crisis and a sharper than expected slowdown in the Chinese economy are weighing heavily on the global steel sector. ArcelorMittal, the world’s largest steelmaker by assets, reported a drop in its core earnings of 28.2 per cent in the second quarter of 2012. Market conditions have been “more challenging than we had expected due to a number of factors including the “still unresolved” debt crisis in Europe, its chairman and CEO Lakshmi Mittal said. 8 Industry Europe
Earnings at German steelmaker ThyssenKrupp fell by 30 per cent year-on-year in its fiscal third quarter ending on June 30, 2012, as orders and sales were hit by the weak economic environment, the company said in August. “The weak economic situation, and in particular the general uncertainty resulting from the unresolved sovereign debt crisis, are increasingly affecting our markets,” executive board chairman Dr Heinrich Hiesinger said. Poor returns in the steel industry are down to a combination of high raw materials prices, volatility and low capacity utilization. Tough
environmental regulations are also putting further pressure on European steelmakers. Production costs in Europe are not only higher than those in emerging markets, such as China and India, but also greater than in the CIS and US. ArcelorMittal announced on October 1 that it would permanently halt hot steel production at its Florange site in France. Instead it is going to shift its focus to finishing. From now onwards, the company said, its focus will lie in “enhancing Florange’s position as a centre of excellence for devel-