DUESSELDORF (Reuters) - ArcelorMittal is reviewing all options for its stainless steel operations, and the sector as a whole would benefit from consolidation in Europe, a senior executive at the world’s biggest steelmaker said.
Jean-Yves Gilet, the chief executive of the firm’s stainless steel activities, told Reuters on Monday on the sidelines of an industry gathering: “We are looking at all options.
“I think consolidation will be good ... because in any market it is good to have a clear leader.”
ArcelorMittal’s chief financial officer said in July the company was studying options for its stainless steel business, including an acquisition or joint venture but not the sale of the assets.
Asked whether ArcelorMittal’s options now included a sale, Gilet said: “So far there is no possibility to speculate on any solution.”
Considering other markets such as raw materials, “everybody knows that in terms of profitability, in terms of stability, consolidation is a good thing,” he said.
“It would be good also if it could happen in stainless.”
ArcelorMittal and its European rivals ThyssenKrupp, Outokumpu and Acerinox have all racked up losses in stainless steel — best known in the form of cutlery and medical surgery equipment — as the worldwide recession aggravated existing overcapacity.
ThyssenKrupp, whose nearly 4 million tonnes of annual stainless steel output and 40 percent market share make it the biggest in Europe, said this month that “everybody is talking with everybody” in terms of consolidating the sector but no conclusions have been reached.
Gilet said on Monday in a speech at the event, held in Duesseldorf, that while stainless steel prices had recovered recently, the road ahead was still bumpy and producers had to be flexible in terms of adjusting capacity.
“The market has not yet come back to normal situation. We can see the end of the tunnel but clearly we don’t know the length of the tunnel,” he said.
He said he expected ArcelorMittal’s stainless steel capacity utilisation in September to reach 80-85 percent.
Stainless capacities early this year were around 50 percent of last year’s level as demand from the automotive and construction industries slumped.
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