“Market conditions were buoyant for the majority of 2018. However, since October of last year, we have seen a severe market downturn, the speed and extent of which has been surprising,” said ArcelorMittal chief executive Lakshmi Mittal.  

Mittal said the company’s mills suffered due to lower prices and rising costs of raw materials. The problem was heightened in Europe, which has seen softer demand and greater competition from imports. 

“Global overcapacity remains a clear challenge. We have reduced capacity in Europe in response to the current weak demand environment, which has also impacted the turnaround of the ex-Ilva facilities in Italy. Further action needs to be taken to address the increasing level of imports entering the continent due to ineffective safeguard measures and we continue to engage with the European Commission to create a level playing field for the sector,” he said. 

In Europe, the company is curtailing the equivalent of 4.2 million metric tons of steel production in the second half and is undertaking further cost-cutting initiatives.  

During the quarter, the company said shipments rose to 21.8 million metric tons, an increase of 4.8% over the same quarter last year. However, the increase largely reflects the acquisition of ArcelorMittal Italia. Excluding those results, shipments fell 0.7%, it said. 

ArcelorMittal said it expects global steel demand to grow between 0.5% and 1.5%, but forecasts that European demand will contract by between 1% and 2%.