ArcelorMittal calls for more safeguards to protect steel industry

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ArcelorMittal calls for more safeguards to protect steel industry

Published Date: 2017-11-13 | Source: Stephen Gunnion | Author: Stephen Gunnion | Comments

ArcelorMittal calls for more safeguards to protect steel industry

The steel producer is already seeing the positive effect of safeguards on hot rolled coil

ArcelorMittal South Africa says a solution is needed to protect the downstream steel industry in South Africa from cheap finished and semi-finished products that continue to be imported into the country. The steel producer says it continues to engage government and the downstream industry on the implementation of safeguards and initiatives to stimulate local demand.

It says it continues to face difficult trading conditions in its home market, with the volatile exchange rate continuing to affect the business significantly. However, import duties on flat products are already helping, with higher demand lifting local sales by 6% in the three months to September as a result of safeguards on hot rolled coil since the beginning of August. Long product sales fell by 16% following strong competition from scrap dealers. Export sales jumped 49%. However, it says the strong international demand was muted by the strengthening of the rand/dollar exchange rate for most of the quarter.

The company says local sales will continue to come under pressure due to tough trading conditions and weak demand, while export sales should benefit from better intentional prices. It believes a sustainable solution is also needed for the high increases anticipated in electricity and rail costs in South Africa, which will significantly impact the viability of some of its plants going forward.

Its shares dropped 8.9% on Friday, extending this year's fall to 43%.



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