ArcelorMittal SA, the South African subsidiary of the world's largest steelmaker ArcelorMittal, has stated that its export-focused Saldanha Steel mill, located in the Western Cape, has been greatly affected by the global slowdown in demand since late Q3 and that it is currently operating far below capacity.
Meanwhile, the Vanderbijlpark plant, the main production site of ArcelorMittal SA, is also operating slightly below capacity as demand from the local market, including packaging and auto, has come to a slowdown.
According to ArcelorMittal SA, which has eight million mt of flats and longs production capacity per annum, maintenance shutdowns originally planned for Q1 2009 are now likely to be brought forward due to the slowdown in demand.
As per market reports, the current production volume of the Saldanha Steel mill may have been cut by as much as 50 percent, as the operations at this facility are mainly dependent on the international markets.
As previously reported by SteelOrbis, in early September ArcelorMittal SA announced its first price decrease for the year and its intention to cut the prices of both hot rolled coil and wire rod by five percent as from October 2008. However, following the announcement in question, the main group ArcelorMittal said that prices for its steel products will continue to remain strong globally and that price cuts in the South African unit were due to specific currency developments and local price factors.