Leading NRI billionaire Lakshmi N Mittal’s ArcelorMittal has decided to mothball one of its plant in Spain, citing “extremely adverse” market conditions that have hit the European steel industry, a week after Tata steel announced over a 1000 job cuts in its plant in England.
The world’s biggest steelmaker blamed the indefinite closure in its steel plant at Sestao in Spain, which could affect as many as 330 jobs, on adverse market conditions in the steel industry across Europe, largely owing to the falling steel prices and cheaper imports from China.
“Management has taken the decision in view of extremely adverse conditions and falling steel prices caused by record imports from China at prices below production costs,” an ArcelorMittal spokesperson said.
The plant will be idled from February and the workers will be temporarily laid off. The steel crisis in Europe has already claimed more than 5,000 jobs at the British steel companies.
Last week, Tata Steel announced 1,050 redundancies mainly at its Port Talbot plant in South Wales, adding to the more than 2,000 positions the company cut last year.
Arcelor Mittal is the world’s largest steel producer, according to World Steel Association data, with an output of almost 100 million tonnes in 2014, about a 16th of the global total.
Its Sestao plant produced almost 2.5 million tonnes of steel a year, according to the company website. It is one of the 12 Spanish operations which the company owns.
Steel companies across Europe are lobbying the European Commission to copy the US by introducing import tariffs on imported steel to stem the flow of cheaper imports. Most of China’s steel industry is government-backed, with Beijing subsidising production so that plants can run at a loss.