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Arcelormittal feels the heat

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By Euronews
Arcelormittal feels the heat
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The slowdown in the global economy continues to weigh heavy on those who produce raw materials.

The World Bank has cut its growth forecasts for the East Asia and Pacific region and warned that China, which has the highest raw material demand in the world, could lose pace more than previously thought.

That is hitting the share price of steel giant Arcelormittal as well.

The world’s largest steel producer’s shares slid by 1.5 percent on the first trading day of the week in Amsterdam.

What is more, Arcelormittal’s European operations are under pressure as the debt crisis continues and even spreads to new countries. Shrinking car sales are significantly hitting the demand for sheet steel.

That is why the company announced several swift measures. Arcelormittal had said 10 out of 32 blast furnaces across Europe were closed temporarily as of July.

But some of those temporary shut-downs turned out to be permanent.

Last week it announced that it decided to stop operations of a blast furnace in France, after two others in Belgium.

That sparked tensions between Arcelormittal, the trade unions and with governments struggling with high unemployment.

As a result, low steel demand over the last three years in Europe and obstacles that Arcelormittal faces with efforts to reduce costs caused company shares to fall by 20.6 percent since the beginning of the year.