Global steelmaker ArcelorMittal is assessing a proposal to spin off its stainless steel business. The proposal could be approved by ArcelorMittal’s board “some time towards the end of this year,” group chief executive Lakshmi Mittal said in a conference call monitored by Steel Business Briefing.      不銹鋼捲  不锈钢卷 stainless steel coil

“We have always believed there is need for consolidation [in the stainless steel industry], but at this time our... intent to spin off means we believe the stainless steel business can grow independently,” Mittal commented. “But if there are any opportunities in the future we will always look at them,” he added.

Consolidation has been suggested as a way of addressing overcapacity, particularly in Europe. According to one industry analyst, “we have 15m tonnes free capacity in the world at the moment which is 50% of production.”  

However, “The discussion... for consolidation has been going on for many, many years and nothing has succeeded in the past four or five years,” Mittal acknowledged.

ArcelorMittal has 2.5m tonnes/year of flat stainless steel capacity in Europe and Brazil. By spinning off the stainless division “we believe it will have much more growth potential, it will have a much better capital allocation, it can increase its market share [and] can participate in the growth of specialty products – it has some of the niche products and is growing in electrical steel,” Mittal noted.

If the spin-off is approved, the Mittal family will be the major shareholder in the new, publicly listed, company. Lakshmi Mittal intends to be chairman of its board, serving alongside ArcelorMittal colleagues Aditya Mittal and Gonzalo Urquijo. Current chief executive of ArcelorMittal’s stainless division, Jean-Yves Gilet, would continue as chief executive of the new company.   

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source: SBB