ArcelorMittal Liège announced its intention to permanently close a number of additional assets in Liège due to a further weakening of the European economy and the resultant low demand for its products.
In October 2011, the Company announced it was to permanently close the blast furnace and steelmaking convertors due to structural over-capacity in Northern Europe. It was envisaged that in future Liège would focus on its downstream activities, operating five core lines and seven flexible lines.
Under a flexible model, which was rejected by unions, these lines would have operated at between zero and 100% depending on market demand. Regrettably, since October 2011, the economic outlook has further deteriorated. Demand for steel in Europe dropped by a further 8 - 9% in 2012 and is now 29% below pre-crisis levels. A number of key customers in the automotive sector have announced major restructuring projects at their plants. As a result there is insufficient demand to support the running of these flexible facilities and no improvement is seen over the medium term.
Despite the closure of the blast furnaces, the Liège facility reported an EBIT loss of more than €200M for the 9 first months of 2012 and no improvement is foreseen in 2013 due to the continued weakness of the European market. This is unsustainable on an on-going basis.
The company is therefore proposing that in order to respond to these structural market changes and further adapt to the reality of demand in Europe, the following six flexible lines need to be closed:
− The hot strip mill in Chertal;
− One of the two cold rolling lines in Tilleur;
− Galvanisation lines 4 and 5 in Flémalle; and
− Electrogalvanizing lines HP3 and 4 in Marchin.
Separately organic coating line 2 in Ramet will be maintained only as a repairing line for the Combiline products.
Additionally, the company is proposing that the coke plant, which is no longer viable due to the excess supply of coke in Europe, also be permanently closed.
The company plans to continue to operate the five core lines which employ approximately 800 people. These five lines are strategic due to their dedicated high quality products, specialized processes and technological innovation.
The company recognises that this proposal will be very difficult for the local community as it affects approximately 1300 people and says it is committed to finding a socially acceptable solution for all those affected. This will include discussions on all means to reduce social impact with Trade Union representatives, including the possibility of reallocation to other sites within the Group.