Steel production may rise in early 2009: ArcelorMittal

After having cut production by  a third (Slowdown forces ArcelorMittal to cut output by up to 35 per cent)  and announced plans for massive layoffs ArcelorMittal to lay-off 16 per cent of US workers, ArcelorMittal, the world's largest steel maker, is now looking at raising productionin the first quarter of 2009.

L N Mittal, chairman, ArcelorMittal, told Bloomberg in an interview, in Almaty, Kazakhstan, where he met with government officials, that the inventory levels are very low and "If the demand will start improving in the first quarter or the second quarter, we will increase production.''

Similar sentiments have been echoed by Ku-Taek Lee, chairman of the World Steel Association and Chairman & CEO of POSCO.

In a statement he said, ''We are in a period of high economic uncertainty. The impact on steel markets is becoming more apparent as we move into the later part of this year. We are currently reviewing our forecasts for 2009, which had been prepared this summer before current events. However, we continue to expect growth in steel demand in 2009 and for the medium term, above the world GDP growth rate.''

Worldwide crude steel production declined 12.4 per cent in October. The world's largest independent steel trader Stemcor does not expect a recovery in steel demand growth until the last quarter of next year. Some analysts think this is wishful thinking as the are no signs of early recovery to the manufacturing sector. 

BRIC nations to drive demand
Over the past decade, the BRIC countries (Brazil, Russia, India, and China) have accounted for 75 per cent of world steel consumption growth. China is the biggest growth driver. The country's steel consumption grew at a compounded annual growth rate (CAGR) of 20 per cent between 2000 and 2007.