World Steel Tube It is reported Britain's richest man Lakshmi Mittal felt a chill wind from Europe, as his steel giant said it had lost billions of pounds-worth of value to the ravages of the eurozone debt crisis.
ArcelorMittal (Other OTC: AMSYF - news) , the world’s biggest steelmaker, said in a statement on Friday it was writing down its European businesses by $4,3bn (£2.6bn) as the region’s economic problems hammer demand for its product.
World Steel Tube Dispatch The Luxembourg-based company, of which Mr Mittal is chief executive and a major shareholder, will record the hit to goodwill in the form of a non-cash impairment charge for the fourth quarter. It said: “The impairment is due to a weaker macro economic and market environment in Europe where apparent steel demand has fallen by approximately 8pc this year, bringing the cumulative demand decline to approximately 29pc since 2007.”
World Steel Tube Dispatch In contrast, steel consumption in the US is judged to be up by almost 8pc this year, leaving it roughly 10pc off its 2007 level in a much a stronger performance.
World Steel Tube Dispatch Analysts warned that further plant closures might be required, although the company stayed silent on this point. It recently sparked a war of words with the French government after it told unions it would permanently close two mothballed furnaces at Florange in France. “We cannot hope for any return in the short term to pre-crisis activity levels,” it said at the time.
World Steel Tube Dispatch In response, the socialist government threatened to nationalise the Florange plant, before an eleventh-hour deal was reached to keep the furnaces going for six years. The company’s writedown may be seen as supporting its argument the site was no longer viable.
World Steel Tube Dispatch Separately, Vale, the mining giant, said it would book a $4.2bn charge after reviewing the value of its nickel and aluminium assets. As well as the weak conditions in Europe, slowing growth in China is weighing on metal demand.World Steel Tube Dispatch