ArcelorMittal Galaţi furnace shutdown threatens 2011 economic growth
The decline in ArcelorMittal Galaţi steel production will have a
direct negative impact over Romania's economic growth, but is also
a negative signal about the world economy trend. The global steel
demand is again showing signs of decline, meaning that the economy
has not regained its health, yet.
The recent decision by billionaire Lakshmi Mittal to close one of
the two furnaces that are operational at the biggest steel plant in
Romania, ArcelorMittal Galaţi, is likely to threaten Romania's
already fragile economic growth expected for 2011, considering the
group's domestic operations are worth about 2% of Romania's
GDP.
Given the 24% higher steel volume that ArcelorMittal produced in
the first half of this year and the soaring sheet metal prices over
the past year, by around 55%, the company's turnover is likely to
go beyond 1.2bn euros at the end of 2010 despite the dramatic
production cut towards the yearend.
Lakshmi Mittal geared up for investments of several hundred million
dollars in Galaţi complex for its modernisation ahead of the
crisis, but investment plans were put on ice amid the plummeting
market.