ArcelorMittal is struggling with lower demand and commodity prices
The world's largest steel producer ArcelorMittal is struggling with a decline in demand while high commodity prices. "We are disappointed with the recovery process," said Louis Schorsch, head of the American division for flat products, on Thursday. In the third quarter, demand for steel has decreased by 6% worldwide. The purchasing managers in the developed countries held back before replenishing the stocks, he said.
At the same time remained high prices for raw materials required for steel making coal and iron ore. China is a high demand for care here. "We have difficulties to pass on raw material costs to customers," added Schorsch. For 2011, ArcelorMittal expects that stagnating prices for iron ore and coking coal at the current level. Schorsch warned, however, that to predict precisely the prices for these commodities is difficult. On another note other steel companies are facing the same issues.
In April, a ton of iron ore on the spot market cost 186 USD. At the time the mining companies to the system of quarterly price-fixing have turned their backs. Since then, they are based on the spot market. Recently, the prices at about 158 USD per ton. For a ton of coking coal would be 209 USD currently due, compared with a price of 129 USD per tonne in the previous year, said analyst Daniel Scott of Dahlman Rose.
