ArcelorMittal idling plant in Spain

The world's leading steelmaker ArcelorMittal has decided to idle its Sestao steel plant in Spain indefinitely. The company cited falling steel prices as the main reason for its decision. The soaring imports of cheap steel products from China and rising electricity costs in the country were also named among other reasons that led to the tough decision.

A spokesman for Sestao steel said in a statement that operations at the plant are going through a very difficult phase, mainly due to the sharp drop in commodity prices and imports from China in the current market environment.

Falling domestic demand has boosted steel exports for many Chinese producers. According to trade statistics, Chinese shipments of steel products to the EU region have more than doubled over the past two years. Therefore, domestic steel prices in the European Union fell by more than 40 percent over a two-year period. The sharp drop in prices, coupled with low demand, has led to the closure of steel production facilities in many European countries. It should be noted that Tata Steel previously announced plans to cut more than 1,000 jobs at its UK steelworks

Sestao smelter will remain idle in February and may remain closed unless market conditions show significant improvement. The Sestao factory is located in Viscay on the banks of the Bilbao River. The plant has a capacity to produce hot rolled coil steel of 1,800,000 tons and 600,000 tons per year of coated coils with a high level of flexibility. The company employs about 330 people.