Declining demand and costly environmental policies have hit ArcelorMittal France
Demand for steel in France has halved over the past decade, which means that ArcelorMittal's Dunkirk facility would not be able to operate at full capacity if it depended solely on domestic demand. The EU's harsh and expensive decarbonization policy, meanwhile, is forcing steel producers to participate in a "competitive race", reducing margins and production volumes, says Alain Le Grix de la Salle, head of ArcelorMittal France.
In response, the unions appealed to the French government to nationalize the company in May. to the announcement of the reduction of 600 jobs and the transfer of some functions to India (see Callanish, May 15).
"We have to ask the question whether a French enterprise in France still has value and can remain in a country where there is no longer a market," de la Salle told the Senate Economic Affairs committee in Paris last week during a televised hearing seen by[b]Callanish[/b].
The French representative offices of the company sell 60% of their products to other EU countries. "Ten years ago, the Italian market was twice as large as the French one; currently, the Italian market is four times as large as the French one. Deindustrialization in France is a fact. Even if you nationalize a company with the intention of reselling it, you have a site[Dunkirk], which is the largest enterprise in Europe in a market where there is no market," warned De la Salle. ArcelorMittal adjusted its facilities in Europe in response to lower demand caused by deindustrialization.
In 2008, the total demand for steel in Europe was about 160 million tons. Today, demand has reached 120 million tons, which indicates a decrease of 25%. This downward trend is related to the challenges faced by the automotive and construction sectors.
The automotive sector is currently undergoing significant structural changes, especially in connection with the transition to electric vehicles, an area in which the company has limited influence. The annual consumption of the automotive sector in Europe is 13 million tons, which is 20% of the total European demand for flat rolled products. In France, this figure is 35%.
"Today, we can no longer compensate for the decline in activity in France and Europe through exports Even if we have quotas for CO2 emissions, they do not cover the entire volume of our emissions, so we pay for CO2. It has become almost impossible to export marketable products due to our costs and global overcapacity. We pay for CO2 emissions, unlike other countries (ratio 4:1). The rules are not the same for everyone," De la Salle continued.
According to his estimates, there are currently excessive production