Mittal Steel Galati, which is owned by Anglo-Indian steel giant Mittal Steel, is changing its production policy. It intends to reduce steel production at its plant this year in the wake of lower demand on the global market.
The plan to reduce production at the Galati plant is part of a bigger move by Mittal Steel to slash production in Europe, after other players on the market, such as Arcelor and ThyssenKrupp, announced similar plans.
Initially, during the first half of the year, Mittal Steel Galati had announced a plan to boost its production, setting a turnover target for 2005 of 3bn dollars, one billion dollars higher than last year.
"Mittal Steel Galati proved last year that it was in a position to benefit from conditions on the steel market, that it was flexible and capable of adjusting to the market. In 2005 we are following the same policy: with the market showing fluctuating prices and high levels of stock, it is only natural that our production should fall accordingly to meet the supply-demand ratio and maintain steel price stability on the market. We will have a clearer picture of the way this will impact our annual turnover in the second half of the year, when we expect the market to stabilise," K.A.P. Singh, general executive manager for Mittal Steel Galati, told Ziarul Financiar. From 3.7m tonnes of steel in 2001, production at the plant increased to 4.6 million tonnes in 2003 and 5 million tonnes in 2004.
The high prices on the global steel market boosted the business of the former Sidex plant in 2004, with net profits reaching close to half a billion dollars. Market conditions this year are somewhat different: the price of steel has fallen, due to the Chinese market, one of the world''s largest consumers of steel, having found better domestic resources to meet demand, analysts say.
adrian.mirsanu@zf.ro
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