ArcelorMittal chief urges Europe to cut energy costs
The head of steelmaking giant ArcelorMittal on Wednesday called on European decision-makers to cut the costs of energy prices to make the steel sector more competitive as the group faces another tough year owing to slumping demand.
Speaking at a shareholders meeting in Luxembourg, Indian-born tycoon Lakshmi Mittal said his company expects steel demand to fall between 0.5-1.5 percent this year, while warning that the first financial indicators for 2013 were already looking dire.
ArcelorMittal’s first-quarter results are to be published on Friday.
“We think the contraction will continue and that the eurozone will stay in recession in 2013,” Mittal said, noting demand has plummeted by 30 percent since 2008.
“The question is… how to make existing activities more profitable” in Europe, he said. “We need a clear plan for improving the very high energy prices in Europe.”
In the beginning of this year, the company announced plans to close six cold-processing facilities in Belgium, eliminating 1,300 jobs, and last month, it also began mothballing blast furnaces at a plant in western France.
The company employs 98,000 people in Europe.
The group has chiefly blamed weaker demand for cars for the morose steel-making climate. For the full year 2012, ArcelorMittal recorded a loss of $3.7 billion.
But Mittal also tried to reassure the company’s stockholders, saying the group would try to counter Europe’s “recession” with emerging market growth, given that demand for steel was expected to grow between 3.5-4.5 percent in China and 3-4 percent in Brazil.
In the United States, he said the market is still “prudent”, but is picking up somewhat thanks to the recovery in the construction and auto sectors.
In terms of company debt, which stood at $21.8 billion at the end of 2012, Mittal said it should be cut to $17 billion by the middle of 2013 and to $15 billion “in the mid-term”.