By Nathan Allen
ArcelorMittal (MT.AE) on Thursday blamed lower first-quarter earnings on a sharp decline in global steel prices, a trend that was particularly pronounced in Europe, where a series of tariffs have failed to stem the flow of cheap imports.
"We continue to face a challenge from high levels of imports, particularly in Europe, where safeguard measures introduced by the European Commission have not been fully effective," Chief Executive Lakshmi Mittal said.
In January the EU agreed to a series of measures aimed at curbing imports after the introduction of tariffs in the U.S. diverted large volumes of the metal into Europe.
The commission imposed quotas on 26 product categories and a 25% duty on imports exceeding those quotas.
However, ArcelorMittal has argued that the measures don't go far enough to protect local producers, and recently committed to temporary production cuts in the region, which it said were necessary to adapt to the current market environment.
"It is important there is a level playing field to address unfair competition, and this includes a green border adjustment to ensure that imports into Europe face the same carbon costs as producers in Europe," Mr. Mittal said.
While ArcelorMittal's quarterly steel production in the region increased 10% on-year to 12.4 million metric tons--largely as a result of its takeover of Italy's giant Ilva mill--operating income dropped to $11 million from $580 million over the same period.
Average selling prices in Europe fell 9% on year to $541 a ton, the company said, compared with a 6.4% drop in Brazil and a 12% gain in the NAFTA region over the same period.
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