Mittal Steel Galati output down 16% in 2005

Mittal Sidex Galati steel mill, part of the Anglo-Indian Mittal Steel Group, the largest producer of steel in the world, witnessed a 16% decline in steel output compared with 2004, as a result of a change of strategy due to the lower demand in steel worldwide in the first three quarters of last year.

“The ever-increasing costs of raw material, power and transportation, as well as the decline in the demand for steel affected our day-to-day operations. Mittal Steel”s production facilities reacted to this situation with a series of cost-cutting programmes. Each facility reduced production, considering the specificity of the market wherein it operates. We lowered production of molten metal, by shutting down a furnace,” Hans L. Rosenstock, Chief Operating Officer of Mittal Steel Galati told ZIARUL FINANCIAR.

Mittal Steel Galati”s steel output amounted to approximately 4.2 million tonnes in 2005, compared with some 5 million tonnes in 2004. Early in 2005, Mittal Steel Galati”s management announced a plan to increase production, setting an output of 5.2 million tonnes and a 3bn-dollar (over 2.3bn euros) turnover as its targets. The plans were upset by the heavy fluctuations on the international steel market, though.

“The international steel industry witnessed an accumulation of stocks on the part of traders in the first half of last year. They decided to build up stocks to avoid possible losses in case prices went up. As a result, the demand for steel went down, although the actual consumption was not lower,” Rosenstock explained.

“The steel market is already showing signs of improvement, with growth of up to 50 dollars per tonne for certain products in the fourth quarter of 2005. We expect steel deliveries and prices to stabilise in 2006, both on the domestic and on the international markets. If the trend of the market maintains the same, output will be larger in 2006 than in 2005,” Rosenstock added.

andrei.chirileasa@zf.ro