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[ferro-alloys.com]ArcelorMittal intends to temporarily shut down the No. 2 blast furnace at its French steel mill in Fos-sur-Mer due to lack of orders, the company indicated in a document shared with S&P Global Platts Wednesday and which was sent last week to the local unions.

According to the document, the closure will take place over the next few weeks. The company said it will restart production when three conditions are met: when the health crisis is under control in the geographical area and even at the European level in which the company operates; when demand has resumed at a minimum level; and when companies, and ArcelorMittal in particular, is able to resume investments amid a slump marked by a sharp decline in resources.

The Fos-sur-Mer works has a production capacity for 4 million mt/year of steel and is one of France's largest producers of flat steel, of which 80% is produced for the automotive sector. Fos-sur-Mer serves the Mediterranean as well as the Maghreb countries, in particular 30% of its market share is in Italy, 30% in Spain, and the remaining 10% is shared between north Africa, Turkey and France. Italy and France are the countries worse hit so far by COVID-19 and with car manufacturing still on hold in both locations.

ArcelorMittal already stopped No. 1 blast furnace at Fos-sur-Mer on March 23 due to the coronavirus outbreak, as reported by Platts.

Europe's steelmakers have cut production and idled lines due to the severe market downturn and economic fallout from the coronavirus spread, with temporary shutdowns at European carmaking facilities. In March 2020, the EU passenger car market recorded a dramatic drop with a decrease of 55.1% in registrations of new vehicles as a result of COVID-19, as reported by the European Automobile Manufacturers Association, ACEA. With containment/lockdown measures taking hold in most markets, the vast majority of European dealerships were closed during the second half of March. Consequently, demand across the region fell by more than half last month, dropping from 1,264,569 units registered in March 2019 to 567,308 units.

ArcelorMittal employs 2,500 at its Fos-sur-Mer site and a further 1,500 outside contractors. The company has invested more than Eur1.3 billion at the site over the past 20 years. To reduce the site's environmental footprint, Eur100 million has been invested over five years, cutting emissions of dust and sulfur dioxides by 50%, according to the ArcelorMittal document.

(S&P Global Platts)

• [Editor:王可]