Steel Mills
ArcelorMittal Seeks Discount from Suppliers
Written by Tim Triplett
July 16, 2019
Perhaps taking a page from automakers’ playbook, ArcelorMittal USA reportedly sent a letter to its suppliers last week stating that it planned to implement a 10 percent price reduction on all existing purchase agreements, effective July 31.
S&P Global Platts reported that ArcelorMittal is calling on suppliers to help it cut costs as it works through a period of oversupply and weak demand for the steel industry.
ArcelorMittal did not respond to Steel Market Update’s request for comment this afternoon and may be in a quiet period ahead of its upcoming earnings report.
“The domestic U.S. steel industry has entered into a very difficult period, driven by oversupply, uncertainty in the markets and continuing inventory reductions at manufacturers and service centers,” stated the letter. “In addition to rapidly declining demand, prices have plummeted from 2018 levels. As one of our valued suppliers, we are asking for your help in dealing with this decline.”
As of SMU’s deadline today, it was unclear what types and how many suppliers received ArcelorMittal’s request/demand for a discount and what the consequences could be for noncompliance.
Tim Triplett
Read more from Tim TriplettLatest in Steel Mills
U.S. Steel sues Algoma over iron pellet shipments
U.S. Steel is suing Algoma over the Canadian flat-rolled producer's rejection of iron pellet shipments, arguing it has breached its contract.
August US mill shipments slip but still higher than last year
The American Iron and Steel Institute reported a decline in the monthly shipments of US mills from July to August.
TransPod, Algoma, Supreme Steel linkup anchors Canadian steel in high-speed transit build
The three Canadian companies have announced a strategic partnership to support the development of an ultra-high-speed transit line from Edmonton to Calgary.
Metallus, USW agree to tentative four-year labor deal
Metallus and the United Steelworkers (USW) have agreed to a tentative four-year labor contract.
ArcelorMittal Dofasco resumes cokemaking after emergency maintenance
The Canadian steelmaker reported on Sept. 30 that “urgent maintenance” was needed in its coke plant off-gas systems. The work required coke oven gas from the No. 2 coke plant to be flared for most of that week.