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ArcelorMittal to cut more steel output in France and Germany over Q4

Singapore β€” ArcelorMittal plans to extend steel production cuts in Europe to its plants in Dunkirk, France, and Eisenhuttenstadt, Germany, the steelmaker said Wednesday. It will also extend shutdowns for blast furnace repairs at its mills in Bremen, Germany and Asturias, Spain, in the fourth quarter.

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The total impact will be between 1 million mt and 1.5 million mt on an annualized basis, the company said.

"The reason for the range is that, as the majority of the reduction impacts the end of 2019, we remain flexible and can adapt according to how the market evolves," an ArcelorMittal spokesman said.

The actual approximate split will be of around 120,000 mt in Eisenhuttenstadt, around 200,000 mt in Bremen, around 200,000 mt in Dunkirk and around 100,000 mt in Asturias (Gijon).

These are the second supply cuts to have been announced by the company this month.

On May 6, ArcelorMittal said it would temporarily idle production at its steelmaking facilities in Krakow, Poland and reduce production in Asturias, Spain. The announcement also impacted the planned increase of shipments at ArcelorMittal Italia. Poland accounts for approximately half of the 3 million mt/year of capacity cuts announced May 6, with the rest broadly split equally between Spain and Italy.

"This is again a hard decision for us to have taken but given the level of weakness in the market, we feel it is the prudent course of action," ArcelorMittal Europe flat products CEO Geert van Poelvoorde said. "This will be a temporary measure that will be reversed when market conditions improve."

"The European steel industry is going through a difficult period, with depressed demand colliding with booming steel imports, high and volatile raw material and carbon prices and the persistence of global overcapacity. We need to work with policymakers to ensure that the imports that are distorting the EU steel market are pushed back and to ensure that vital European jobs and skills are not lost", a Eurofer spokesman said, declining to enter into the specifics of ArcelorMittal's decision.

European flat steel prices have stabilized somewhat following recent supply cuts. Since the cut announcements, all the large European mills have increased their prices but they have managed to pass them only by few euros.

During the first four months of this year, the Platts daily hot-rolled coil price has decreased by around Eur33/mt on low demand to around Eur489/mt base ex-works Ruhr. Prices continued to drop in May, when ArcelorMittal announced its first cuts. Since then, prices in the Rhur area have moved sideways, staying mostly around Eur477.50/mt base ex-works Ruhr.

-- Clement Choo, clement.choo@spglobal.com

-- Annalisa Villa, annalisa.villa@spglobal.com

-- Edited by Nurul Darni, newsdesk@spglobal.com

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