After being forced to shut down portions of multiple factories due to low demand and high energy prices, ArcelorMittal SA stated that it anticipates a decline in its European steel output in the fourth quarter of the year.
The fourth quarter of last year saw a 1.5 million ton decrease in crude steel output on the continent for Europe's largest steelmaker, a company representative reported. That is a 17 percent YoY decrease.
The energy crisis in Europe is hurting the continent's metal producers by driving up prices and at the same time reducing demand from important consumers. Even though aluminum and zinc, which use more energy, have been more severely impacted than steelmakers, they are still being compelled to idle capacity.
It's an ominous indication for Europe's economy, which is in danger of going into recession as a result of Russia cutting its natural gas exports. The demand for steel is seen as a growth indicator, notably in the construction and industrial industries.
According to Jefferies, ArcelorMittal's capacity in Europe has been reduced by 20%, making up around 10% of the total capacity. Due to low demand, several of its blast furnaces in Spain, France, Germany, and Poland have remained idle.
It may signal the end of a period of record earnings for Europe's steel sector, which has endured much hardship. Steel prices reached record highs as a result of the pandemic's quick economic recovery, and ArcelorMittal last year reported its greatest profit since the financial crisis.
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