In 2015 the worldwide production of steel decreased by 2.8% to 1.6 billion tons of steel. The worldwide consumption of
steel decreased in all subcontinents, with exception of Europe. Most striking when looking back at 2015 is the slower growth of China. Chinese steel demand fell, resulting in an overcapacity of steel on its local market. Trying to compensate for this weaker (local) market situation, China started exporting steel on a massive scale. This resulted in two things: replacing volume in the European market - the market share of imported steel in Europe increased up to 15% in 2015 – and causing a negative price effect. Chinese steel plants are funded by their government, which enables them to sell their steel products at dumping prices on the European market. As a result, the sale price of steel in Europe fell almost 22% in 2015.
We are of course in favour of free trade but this does not extend to the current Chinese dumping practices. The topic has been raised multiple times to the European Union, national and the regional authorities. We ask for a level playing field towards our worldwide competitors. This entails:
- Imposing anti-dumping measures (import levies) to companies that sell their steel on the European market at prices lower than the actual cost of production.
- Not granting the market economy status (MES) to China. If MES were granted, all anti-dumping measures would become nearly impossible to impose.
The current situation cannot be compared to the crisis of 2009, however. European demand for steel remains good and the debt rate of our Group has improved.
The strategy of ArcelorMittal Flat Products Europe and of ArcelorMittal Gent thus remains unchanged:
(1) aligning our production capacity to market demand,
(2) fully utilising the capacity of our installations, and
(3) focusing on products with a high-added value to raise our market share.
As a response to the difficult market situation, we have added a fourth step to our strategy: operational excellence. One of the most visible effects of this is the integration of the ArcelorMittal sites of Ghent and Liège into one cluster, as of 1st January 2016.
Despite the difficult market situation, we can look back with pride at our accomplishments of last year. In 2015 we successfully repaired our blast furnace A, which is now once again ready for years of high production. We have all the cards in our hand to make 2016 a breakthrough year with high production volumes and excellent shipping levels.
In addition, we are in the middle of executing an €140 million investment programme, spread over several years, allowing us to produce the Fortiform® steel of the future. Phase 2 of the dynamic soft reduction in the steel shop, two new rolling stands in the hot strip mill and a new furnace and zinc pot in our hot dip galvanising line 3 all make up part of this investment programme. The year 2016 will be key in bringing our new ultra-high-strength steel to market. By doing so, we want to strengthen our position as preferred supplier to our automotive clients.
Our motto remains: To continue playing in the Champions League of the steel industry. WCM (World Class Manufacturing) is the best methodology to achieve our aim of continuously improvement, through five steps:
1. Improving our safety and health performance as well as the engagement of our employees
2. Increasing our productivity and eliminating our bottlenecks
3. Efficient and effective use of processes and resources
4. Innovation in all aspects of our business conduct
5. Investing in sustainability and environment
Our strategy needs to enable us to remain the ‘leader of the pack’ within the ArcelorMittal Group. Together we make the difference in safeguarding the sustainability of our company. I wish you an enjoyable read of this fifth edition of our corporate responsibility report.
Matthieu Jehl - CEO and Chairman of the Management Committee of the Cluster ArcelorMittal Gent-Liège