CAPTION: Flat strip steel rolled into coils is stored in the hot rolling mill of ArcelorMittal Eisenhüttenstadt GmbH. (picture alliance/dpa)
Steel giant ArcelorMittal will temporarily suspend its operations at its Krakow steelworks due to weaker demand, the firm said in a statement on Tuesday.
The process of idling operations at the blast furnace and the steel shop, which have a production capacity of 1.6 million tonnes per year, will start on November 23, the firm said.
"As the situation on the steel market continues to deteriorate and the outlook remains gloomy, we regrettably have no choice but to temporarily idle the blast furnace in Krakow," ArcelorMittal chief executive Geert Verbeeck said in the statement.
ArcelorMittal runs three blast furnaces in Poland: one in Krakow and two in Dabrowa Gornicza.
"Manufacturing, particularly the auto industry, has performed poorly, contracting in many EU countries - in Germany production of passenger cars declined by as much as 11 per cent," Verbeeck said. "This market contraction and the global overcapacity are putting additional pressure on prices of finished goods."
ArcelorMittal estimates the current overcapacity on the global steel market at 400 million tonnes.
The firm plans to resume Krakow operations once the market situation improves. Operations at the blast furnace were suspended for nine months in 2010-11.
The firm has no plans to lay off some 800 own employees at the Krakow plant, the Polish Press Agency quoted Verbeeck as saying. Some of the Krakow employees will shift to maintenance work, while others may be moved to other plants or offered reduced "idle" salaries, Verbeeck said.
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