European Steel Industry Hammered by Coronavirus

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Leading steelmakers are cutting European production and jobs as the coronavirus worsens and hammers demand.

The largest worldwide steel producer, ArcelorMittal (NYSE:MT), has announced that it is reducing production from its European operations "to ensure the wellbeing of our employees is maintained and that production is aligned with demand." Germany's ThyssenKrupp announced it was cutting 3,000 jobs in its steel business as part of a coronavirus "crisis package" and longer-term efforts to improve the performance of the unit. Tata Steel announced that it was introducing new virus protection measures and that production will be hit by the production halts by European carmakers.

"ArcelorMittal takes the risks associated with the coronavirus outbreak very seriously and the safety and wellbeing of our employees is of paramount importance," the company stated. "At all global operations we are following government and World Health Organisation advice and guidelines in order to protect employees and prevent the spread of infection. We will continue to monitor the evolution of the coronavirus in each of our operating markets and take decisions accordingly to ensure the wellbeing of our employees and our ability to meet customer demand."

Oliver Burkhard, executive board member for human resources and labor director of ThyssenKrupp AG said: "Today we have developed short-term and long-term solutions. On the one hand, an immediate 'Corona crisis package' to be able to act at short notice. On the other hand, a collective agreement to secure the long-term future. The agreement shows once again that we stand together in difficult times and implement appropriate solutions with the employees and not against them."

The first step will be a reduction of up to 2,000 jobs in the next three years. Roughly another 1,000 jobs are to be cut by 2026. The plan is to strengthen the integrated production site in Duisburg by closing individual units at other locations. Of the 3,000 job cuts, around 1,000 will be cut in administration; 800 jobs are affected in the heavy plate segment where the company said it sees "no development prospects." Around 1,200 jobs will be cut beginning in 2022 through the optimization of the production network.

Tata Steel stated: "The impact of the outbreak on steel-using industries is varied. While demand is steady in some sectors, production pauses in the European automotive sector are expected to have a knock-on impact on steel supply. In line with customer demand, Tata Steel has made production adjustments at some of its European steel mills. To date, the impact of these changes on its steelmaking hubs in Ijmuiden and Port Talbot has not been significant. Given this is a fast-moving situation, Tata Steel is working closely with customers and suppliers to reduce possible impacts from the coronavirus outbreak and restrictions."

In Italy, the hardest hit European country by coronavirus, at least four major steel mills have been shut down as the country struggles to contain the outbreak. They include the beams plant in San Zeno Naviglio owned by Duferdofin-Nucor and the Tenaris Dalmine tube-rolling mill. Last week Industrial Info reported that Volkswagen AG, Ford and Daimler had announced plans to shut down production at all of their European manufacturing plants due to the coronavirus. Industrial Info is tracking almost 400 projects in Europe's automotive sector worth a combined $20.5 billion. For additional information, see March 25, 2020, article - Coronavirus Forces Volkswagen, Ford and Daimler to Shut European Car Plants.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.