Tata Steel Nederland says it is “tightening the belt” by means of cost-cutting measures to cope with current deteriorating market conditions. It is the first northwestern European steelmaker to publicly announce such measures in reaction to the ongoing economic weakness.
European industry is experiencing tough times and this is directly affecting the steel market. Steel prices are low and customers are taking a wait-and-see approach, the company says in a statement. It concludes that the steel market will not recover after the summer.
The firm is therefore adopting cost-saving measures that directly save money, including measures in procurement, sales and inventory management. In addition, a partial hiring freeze has been implemented, as well as a significant reduction in training and business trips.
The company underlines it will keep its eyes on the transition to clean, green and circular steel, and that the cost-cutting measures will also serve to stick to that long-term plan.
Notably, the firm does not speak of reducing production. In fact, it states that “Tata Steel Nederland continues its steel production unabated in order to supply customers directly when the market recovers.”
According to a Dutch buyer of coil products made by Tata Steel Nederland, it is likely that European steelmakers will temporarily shut down blast furnaces to cope with the lack of demand. “Cutting production would be the best solution to get a better balance in supply and demand, but who will start?” he wonders.
Earlier this week, Kallanish contacted all the main coil-making producers in northwestern Europe to ask about plans to reduce production. None of the mills replied, including Tata Steel Europe.
Christian Koehl Germany
