Market Improving For U.S. Division of World's Largest Steel-Maker

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Researched by Industrial Info Resources (Sugar Land, Texas)--After a horrendous year that witnessed steel demand dip to new depths because of automotive plant closures and a slowdown in residential and commercial construction, the U.S. steel industry is showing signs of a slow recovery. According to Worldsteel, U.S. steel production was up almost 49% year-over-year in January 2010.

Speaking at the Southern Gas Association Supply Chain Management Conference last week in Savannah, Georgia, Roy Platz, the director of marketing for ArcelorMittal USA, a subsidiary of ArcelorMittal (NYSE:MT) (Luxembourg), stated the company's mills in the U.S. were running at 68% capacity, which is up from the 50% capacity the sector operated at for most of 2009. The fact that demand is returning, albeit slowly, is good news for the world's largest steelmaker, which owes a large portion of its sales to the beleaguered automotive industry.

Just last week, the company announced it would increase capital spending by 43% in 2010, spending about $4 billion. About 75% of that would go to maintenance projects, but there also are significant plans to expand its upstream businesses. To meet increasing worldwide demand for resources such as coal and iron ore, ArcelorMittal is expanding its metallurgical coal and iron ore mines in the U.S. and building four new iron ore mines in Africa.

Platz also hinted at a major plan for a flat-rolled steel capital project at a location in the U.S. to be announced soon. ArcelorMittal operates about 25 steel mills and mines in the U.S.

For more on ArcelorMittal, see February 10, 2010, article - ArcelorMittal Ends Brutal 2009 with Positive Fourth Quarter.

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