Following the announcement of its 2009 first quarter loss, the world largest steelmaker ArcelorMittal said in a conference call on Wednesday, April 29, that it has increased its global production cut to 50 percent in the second quarter of 2009 compared to 45 percent in the first quarter due to weak demand for steel products and cost saving measures.
The Luxembourg-based company initially cut its global crude steel production capacity by 45 percent on average in the fourth quarter of 2008, and then said it would extend the cut into the first quarter of 2009 due to weak steel demand.
ArcelorMittal said it will continue "temporary production cuts in line with reduced demand," and added that European sell-down of steel inventories was "progressing" with signs of price increases visible in some products and some markets.
"China's over-production has put negative pressure on prices but some improvement is expected as real demand improves and capacity utilization rises above 90 percent," ArcelorMittal stated.
In North America, ArcelorMittal said there was potential for price increases as apparent demand improves in the near term.
According to the company, the stainless steel market is also showing signs of improvement, with nickel prices initiating a recovery.
Meanwhile, ArcelorMittal South Africa CEO Nkululeko Nyembezi-Heita said that the unit might boost the proportion of production capacity in use to 65 percent in the second quarter from about 60 percent now.