ArcelorMittal SA will only return to full output when demand returns

Africa's largest steel producer, ArcelorMittal SA's return to full production will be informed by demand.

On Sunday, President Cyril Ramaphosa announced a further easing of Covid-19 lockdown regulations to Level 3, allowing industries such as steelmaking to resume full operations.

However, the steelmaker "...will only fully restart operations as the demand for steel becomes visible," it said in a statement.

The local demand for steel was at its lowest before the Covid-19 pandemic shutdown, which also hit exports as governments around the world enforced measures to contain the spread of the virus.

However, the company was confident that the adjustment of lockdown regulations would boost demand from local customers, cautioning that "the harsh reality is that no industry has remained untouched by the pandemic".

"It is likely that it will be many months, if not years, before the economy starts to revive and the demand for steel begins to grow again," it said.

In February, ArcelorMittal revealed that it had incurred a loss of R4.68bn for the year to 31 December 2019, as the "downturn in world steel" deepened.

The company supplies more than 60% of the steel used in South Africa, and has operations in Vanderbijlpark, Vereeniging, Saldanha and Newcastle. It stated that that available finished stock and work in-progress were sufficient to support delivery of confirmed orders to the end of June.

Compiled by Sibongile Khumalo

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