ArcelorMittal stock recently plunged to a 52-week low of $4.29 a share and remains mired under $5 a share at a time when the steel industry as a whole is struggling.
Analysts have called on the Luxembourg-based steelmaker to cut back on capacity at a time when 38 percent of the nation’s steelmaking capacity is unused, according to the American Iron and Steel Institute.
An analyst asked during last month’s third quarter earnings report conference call whether ArcelorMittal would take more capacity offline to address the overcapacity program. ArcelorMittal lost $771 million in the third quarter, though it turned a small profit in North America, and has lost nearly $1.3 billion so far this year.
The company, which is one of Northwest Indiana’s largest employers, closed Indiana Harbor Long Carbon in East Chicago earlier this year and has been threatening to close more finishing lines. But ArcelorMittal hopes to preserve its market share as the largest steelmaker in the world, said Louis Schorsch, ArcelorMittal chief executive officer, during the 3Q conference call in November.
“But I think we see major opportunities for the business in terms of rationalizing the downstream footprint. I think we have a solid market position. We’ve been able to maintain our share. About a third of our production goes into just the automotive alone, not to mention other high-value added attractive market,” he said.
ArcelorMittal is confident in the number of blast furnaces it currently has going, and the opportunities for downsizing are in the finishing lines, Schorsch said during the conference call.
“It doesn’t mean that based on markets up and down and inventory cycles and so on that you might not temporarily idle a furnace. We have one furnace idled currently,” he said. “But in terms of structural closure and exiting business that’s certainly not something in our expectations or that we’re thinking about or discussing currently.”
The steelmaker has operations in East Chicago, Burns Harbor, Gary, Riverdale and New Carlisle.