By Devon Maylie
JOHANNESBURG--ArcelorMittal South Africa (ACL.JO) said Wednesday
that it has suspended a furnace in South Africa indefinitely this
month due to weak demand and said it could close more production
capacity if steel consumption doesn't improve.
The steel producer, the South African subsidiary of
ArcelorMittal (MT), said it shut the electric arc furnace at its
Vanderbijlpark plant on Oct. 16.
"This is an indefinite shut...restarting that furnace isn't
justifiable in current market conditions," said Chief Executive
Nonkululeko Nyembezi-Heita, adding it would lead to the loss of
about 500 metric tons of annual production. "If it proves to be
insufficient then we will look for further capacity cuts."
The steelmaker Wednesday reported a headline loss of 168 million
rand ($19.37 million) for the third quarter and said the loss in
the fourth quarter would be bigger due to the traditionally slow
December period for consumption and generally weak demand
backdrop.
"If we don't foresee a recovery in 2013, which early indications
are that it would only happen in the latter part of next year, then
that does say we have excess capacity," Ms. Nyembezi-Heita
said.
The company also said it expects arbitration over an iron ore
pricing agreement with Kumba Iron Ore Ltd (KIO.JO) to happen in the
second half of 2013.
Write to Devon Maylie at devon.maylie@dowjones.com