Arcelor to raise steel sales to the European auto sector

Arcelor to raise steel sales to the European auto sector

Europe's biggest steel producer Arcelor announced that company's steel sales to the European automotive industry will rise by 5% next year largely due to new contracts signed with the automotive companies in order to ensure them the adequate material. The largest steel producer to the automotive industry in Europe is Arcelor, with a share of more than 40%. In recent weeks, Japanese automaker Nissan has been forced to suspend output after its main suppliers Nippon Steel and JFE could not provide sufficient steel to the company. On the other hand, there aren't any adverse signs that European automakers could not get enough steel. The sharp price rises appeared last year in the automotive industry have started to slow down. However, many industry analysts believe steel shortages in certain markets will persist in 2005. Arcelor pointed out that car and components makers are ready for the hefty price rises between 20-50% in order to obtain high quality and reliable supply. Arcelor's large customers include Renault of France, Sweden's Volvo, Volkswagen of Germany and General Motors of the US. Customers among component makers are Canada's Magna and Gestamp. Certain analysts find Arcelor's expectations for 2005 shipments surprising. European automotive industry is expected to expand by maximum 2% next year or some observers think growth in this sector could be zero or even that the market could shrink.