ARCELORMITTAL FIGHTS TO STAY AFLOAT

Posted: 01/10/2015 in Business
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DEMISE: 102 year-old ArcelorMittal’s Vereeniging Works

DEMISE: 102 year-old ArcelorMittal’s Vereeniging Works

SA’s largest steel mak¬er, ArcelorMittal said that it was putting its Vereeniging long steel works into “emergency care” until the end of next month, underlining the dire state of the industry.

This comes after ArcelorMit¬tal’s rival Evraz Highveld Steel and Vanadium announced it planned to temporarily close its steelworks and halve its 2200 strong workforce.

ArcelorMittal South Africa (AMSA) said it has already spoken to about 1,200 affected employees about the decision. And that it’s “going to fight” subsidised steel from China.

AMSA CEO Paul O’Flaherty said it had been slowing down output at the Vereeniging facility for some time now, and staff was already work¬ing on “short-time”.

“The steel is being sent to South African ports at prices as much as 25% be¬low local production costs, making producers uncom¬petitive. This is survival time. We cannot allow the company to burn cash non-sustainably,” O’Flaherty said.

The company was con¬sidering moving all billet production from its Ver¬eeniging works to its more efficient Newcastle furnace in KwaZulu-Natal.

AMSA has reported losses for four years amid weak¬ening demand and rising operating costs. Steel prices slumped in 2015 as China, the biggest producer, shipped excess output over¬seas.

“The company has asked the government for tariffs on Chinese steel imports 10% to 15% on three prod¬ucts, and will submit more applications by the end of the month and is also con-sidering anti-dumping ap¬plications on wire rods and rebar products,” said O’Flaherty.

The 102 year-old Ver¬eeniging Works is the South Africa’s oldest steelworks.

Department of Trade and Industry spokesman, Sidwell Medupe, said the government was concerned by the demise of the steel industry. “The government is committed to resolving the matter,” he said.

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