ArcelorMittal: long steel production ceases in South Africa
January 06, 2025 at 03:44 am EST
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ArcelorMittal announced on Monday that it had decided to discontinue its long steel production activities in South Africa, faced with economic conditions deemed too unfavorable.
In a press release, the steelmaker justifies its decision by the influx of cheap Chinese steel imports into the country, as well as rising energy prices and logistics costs.
Persistent overcapacity in the market, both globally and locally, and far too low international steel prices have exacerbated the entity's structural difficulties', explains the group.
According to its calculations, steel imports into the country have soared by almost 50% since 2018, while exports have fallen by 40% over the same period.
ArcelorMittal South Africa, which plans to cease manufacturing long products by the end of January, says its capacity utilization rate was down to just 50% in the face of the current market weakness.
The decision is set to affect around 3,500 direct and indirect jobs, the company says in its statement.
For the 2024 financial year, the steel giant's South African subsidiary expects to see its annual loss per share widen to between 5.48 and 6.21 rand, compared with a shortfall of 3.52 rand in 2023.
Quoted on the Paris Bourse, ArcelorMittal shares lost 0.5% in early trading on Monday morning, compared with a gain of around 0.6% for the CAC 40 index.
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ArcelorMittal is No. 1 worldwide for steelmaking. Net sales break down by activity as follows:
- sale of carbon flat steel (56.6%): spools of hot and cold rolled laminated steel, coated sheets, etc.;
- sale of carbon long steel (20.7%): I-beams, concrete rounds, merchant steels, machine wire, saw wire, steel pilings, mass transit rails, special profiles, and wire drawing products;
- sale of tubular products (3.2%);
- sale of iron ore and coal (1.8%);
- other (17.7%): primarily steel processing, distribution and trading.
The group's products are primarily intended for the following sectors: automotive, household appliances, packaging and construction.
Net sales are distributed geographically as follows: Germany (9.6%), Poland (6.5%), France (6.8%), Spain (5.8%), Europe (23.7%), United States (13%), Americas ( 25.4%), Asia and Africa (9.2%).