Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

South Africa largest steelmaker, ArcelorMittal, has invoked force majeure on its contracts, as “where appropriate”, as of April 3. 

The force majeure clause in contracts allows certain terms to be voided because of unavoidable circumstances.


This comes on the back of the South African government’s three-week lockdown, scheduled to end on April 17, to fight the spread of COVID-19 in the country. All mining and processing operations in the country have been halted. Steel makers have been scaling down production even though the government is currently allowing port operations for outbound shipments to continue.


The South African steel industry will face more challenges amid an already struggling economy until the global and local economic impact of COVID-19 is eased, an ArcelorMittal statement said.


Headquartered in Vanderbijlpark, Gauteng, ArcelorMittal South Africa has a production capacity of 7mn mt of liquid steel per annum, with approximately 4.8mn mt of saleable steel products. The company supplies 61pc of the steel used in South Africa and exports the rest to sub-Saharan Africa and elsewhere.


The steelmaker has cut salaries for all its employees, effective this month, for a period of three months. The company has allowed its employees to work from home, apart from maintenance staff at the Vanderbijlpark steel works and Saldanha steel works.  


Davis Index has reported on April 4, the company plans to cut crude steel production at Fos-sur-Mer facility in Southern France plant, citing pandemic situation in the Europe.



 It is all about cost savings for ArcelorMittal. The company will further cut spending on noncritical goods and services. The significant drop in local steel demand was already factored in to its H1 forecast even before the first COVID-19 case hit South Africa.

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