Mittal Steel will cut its global steel production by 1 million tonnes in the third quarter to compensate for lower demand, the world's biggest steel maker said on Wednesday.
Mittal's plans follow similar moves by other European steel makers, which last week announced production cuts for the third quarter in the face of sagging demand and high import volumes due to the strong euro.
Mittal, which made similar reductions in the second quarter, shipped 42.1 million tonnes of steel in 2004 and had revenues of $ 22.2 billion.
The production cutbacks will be equally split between Mittal's North American operations and those in Europe and elsewhere in the world, the company said.
"It is essential that we act in a responsible and mature manner, and respond accordingly to current market dynamics," Mittal Steel Chief Executive Lakshmi Mittal said in a statement.
"The production cutbacks that we have announced today will help to reduce the inventory build up that we currently have and help to restore equilibrium to the global supply and demand equation," he said.
PROTECTING MARGINS
Arcelor, the world's second-largest steel producer, has said it would continue to cut output in the third quarter as it did in the first half.
Arcelor said on Wednesday that its European production of flat steel, its main product, will be running at 80 percent of capacity in the third quarter, the same as in the second quarter.
The company, Europe's largest steel maker, also said it cut its production by 1.8 million tonnes in the first half, spread evenly among flat and long steel products.
Germany's ThyssenKrupp has said it would cut steel output by around 200,000 tonnes in the third quarter, while Anglo-Dutch firm Corus said it would accelerate cuts to 160,000 tonnes per month in the third quarter.
Analysts said the latest moves showed steel makers were more serious about protecting steel prices and margins than about preserving production volumes.
Steel prices jumped last year as China's economic boom sucked up raw materials worldwide, with prices peaking in the second half as clients built up stocks amid fears of a shortage.
Eurofer, the European federation of steel makers, said last month that it expected real consumption to grow by only 1.2 percent in 2005, compared with 2.8 percent in 2004.
Mittal, which is bidding for Turkey's state-owned Eregli Demir Celik, said on Tuesday that it cut its European steel production by 360,000 tonnes in the third quarter.
The company's shares were 2.31 percent higher at 19.90 euros by 1350 GMT, while Arcelor was up 0.55 percent at 16.44 euros in Paris. |
