Russia’s biggest steelmaker, is deferring indefinitely an ambitious $8bn investment programme in a further sign of how the downturn is forcing manufacturers to cut capital spending.
The company – which has expanded strongly particularly in the US in the past few years – on Tuesday said it was reducing its fourth-quarter earnings forecast and making further production cuts on top of those it has previously announced.
Severstal is already reducing output at its US plants by 30 per cent, in line with actions by other big steelmakers. ArcelorMittal, the world leader in this industry, is cutting back production by 35 per cent while Corus, the European arm of Tata Steel of India, is reducing output by 30 per cent.
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We have also seen reports this morning suggesting that Severstal is in talks with state bank VEB to refinance 75 percent of a $325 million bond due in February, 2009.