Steeling itself for a slowdown

China has made life miserable for the domestic steel industry, which is already grappling wih high leverage and a demand bust

Desperate times call for desperate measures. This adage would be apt for Lakshmi Niwas Mittal, who lords over the biggest steel empire in the world but is currently stuck on a hot tin roof. ArcelorMittal, a company that produced 98 million tonne of steel last year, compared with the world’s second-largest producer Nippon Steel, which produced only 49 million tonne, is grappling with a downturn in the steel industry. This situation is a result of the Chinese steel industry dumping its output across global markets, rendering just about every steel-maker across countries uncompetitive. Last year, China exported a record 93 million metric tonne (MT)of steel and in the first six months of 2015, China’s steel exports increased 27%, creating a glut in international markets that is, in turn, pulling down steel prices.