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Europe’s Steel Industry Probably Past Bottom, ArcelorMittal Says

Published on date 10th June 2019.

Europe’s troubled steel market is showing signs of bottoming out, according to the world’s No. 1 producer ArcelorMittal.

While weak auto industry demand means it’s too early to call a recovery, steel prices in the European Union are starting to climb, said Geert van Poelvoorde, the company’s chief executive officer for flat products in Europe. ArcelorMittal announced output cuts in Europe last month as the market came under pressure, with U.S. tariffs deflecting shipments to the EU and higher iron ore prices boosting costs.

“If the global economy stays as it is today, the steel industry has probably past the bottom,” Poelvoorde said in a phone interview from Brussels. “I really hope the price drop is now over.”

Prices for North Europe hot rolled coil rose by 15 euros a ton to 480 euros in the week through June 3, the biggest increase in more than a year, according to Kallanish Commodities.

“Higher prices are a matter of survival for the industry now,” van Poelvoorde said. The recent uptick is “far from sufficient,” with prices still 50 to 60 euros below year-earlier levels and costs much higher, he said.

ArcelorMittal joined other European steel producers in writing an open letter last week to EU leaders, saying that without stronger import caps, the crisis in the region’s industry would worsen.

The market may start to recover in the fourth quarter of this year if a rebound in the auto sector materializes, and if the European Commission limits low-cost steel imports flooding the continent, van Poelvoorde said. If regulators don’t do their job, the European industry will contract further, he said.

The commission said Friday it would speed up its steel import review, which was previously scheduled for completion by the end of September.

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