Production Pruning – US steel mills confirm output increase
Monday, 29 Jun 2009
Industry leaders said that global steel producers are cautiously increasing production, albeit from extremely low levels, as signs emerge of modestly improving demand and recovering investor confidence.
Mr LN Mittal CEO of ArcelorMittal SA, while speaking to participants at American Metal Market’s Steel Survival Strategies conference in New York City, said that he has been seeing green shoots of stronger demand. He added that “Chinese steel demand is now forecast to show growth this year compared with a previously expected decline. The de stocking period has led to historically low levels of inventory, for example here in the United States, where inventories are at their lowest since 1983.”
After Mr Mittal’s remarks, Mr John P Surma head of United States Steel Corporation indicated the likelihood that at least one blast furnace will be restarted at the company’s mill in Granite City. He said that “Market conditions have improved a bit lately.”
Mr Surma said cited General Motors Corporation’s move to discontinue several unprofitable brands, Chrysler LLC reportedly being near an end of its bankruptcy process, labor concessions for both companies and an expected uptick in sales from the recently passed cash for clunkers bill. He said that “We’re encouraged that there is some stability is returning to the domestic auto industry. We’re very excited about what’s happening with GM.”
Both Mr Mittal and Mr Surma also noted their companies’ recent success in raising funds. Mr Surma said that US Steel’s public offering of common stock and senior convertible notes raised nearly USD 1.5 billion. He added that “Maybe the capital markets are sensing that the worst is behind us.”
(Sourced from Associated Press)