According to ArcelorMittal's statement, its profit for the January-March period fell to $938 million from $1.1 billion in the same period last year, while sales fell by 14%.
This indicates that the overall economic situation remains weak and customers prefer to wait before stocking up.
ArcelorMittal is facing a difficult decision regarding the situation of around 400,000 steel workers in South Africa. The company is urging them to restrain wage increases to avoid the risk of job losses and to consider their financial difficulties. CEO Kobus Verster emphasizes that the halcyon days when the steel industry could now easily pay wages above inflation are over. But workers and unions are struggling to adapt to new economic realities. The risk of ArcelorMittal closing its loss-making operations jeopardizes the future of thousands of workers and contractors.ArcelorMittal remains hopeful that the government will be able to implement reforms within six months, but has been criticized for this. The company says it may have to decide to shut down if logistics and energy issues are not resolved. In the longer term, economic growth and increased infrastructure projects could boost steel demand.
Steel demand in South Africa is declining and ArcelorMittal's capacity is too high to meet demand. This situation causes the company to have wage disputes with workers and to revamp its operations. At the end of last year, the company recorded another financial loss of 1.4 billion dollars.
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