ArcelorMittal suspended dividend payments and withdrew its global steel outlook because of market uncertainties created by the coronavirus pandemic.
The steel industry has been hit because of curbs on production and the movement of people as governments battle to control the spread of the virus. That comes after the sector was pummelled in 2019 by slumping demand from automakers, trade wars and sluggish economies in Europe.
ArcelorMittal withdrew its forecasts for global steel consumption — a barometer of economic growth — because of the market uncertainty resulting from the virus lockdowns.
“It seems likely that over the course of this month countries will start to announce details of their “exit” strategies,” ArcelorMittal Chairman Lakshmi Mittal said Thursday in a statement. “Whilst these are likely to be an easing, not an immediate ending of lockdown, construction and manufacturing are expected to be among the first sectors to be permitted to re-start operations and indeed we are seeing signs of customers re-starting production.”
Just three months ago, the company had expected the coronavirus to only have a short-term impact on demand.
Fitch Ratings said last month the steel market may have to wait until late next year for a full recovery. China Baowu Steel Group, which surpassed ArcelorMittal as the world’s biggest producer last year, has warned a global recession and a drastic slowdown of the auto market risk fuelling oversupply.
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