Arcelor-Mittal, the world's largest steel company, said it will begin temporary output stoppages at several flat steel sites in Europe, in response to rising inventory levels among customers.
The company will delay a blast furnace restart at its Dunkirk, France factory by two weeks, while maintenance work at a furnace in Aviles, Spain, will be carried out ahead of schedule, in the first quarter of 2007.
Christophe Cornier, Arcelor-Mittal's vice-president in charge of European flat steel activities, said 'underlying demand continues to be healthy,' but client inventories are now increasing after strong supply in the first half of this year.
Whilst recent price trends are not mentioned in the press release, this announcement follows shortly after MEPS reported that in Southern Europe prices are falling. It's fair to add that in the same report, MEP's went on to say that in Northern Europe prices are still rising slowly.
With International steel capacity appearing to continue to grow, and demand in the West likely to remain static, it's inevitable that manufactures will manage output to ensure no collapse in prices.