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ArcelorMittal cuts $4.3bn from value of Europe business

image captionArcelorMittal expects European steel demand to remain weak

Steel giant ArcelorMittal is to write down the value of its European business by about $4.3bn (£2.6bn) because of the economic downturn on the continent.

The world's largest steelmaker said steel demand in Europe had fallen by 8% this year, and by about 29% since 2007.

Arcelor said it expected this weak demand to persist in the "near and medium term".

The eurozone returned to recession in the third quarter of 2012, after the bloc's economy contracted by 0.1%.

This followed a 0.2% contraction in the previous three months, as the region struggled to cope with the debt crisis.

Political row

Announcing the impairment charge in goodwill in its European business, Arcelor blamed the "weaker macro economic and market environment in Europe".

In contrast to the decline in European markets, the company said that steel consumption in the US was up 8% this year.

ArcelorMittal has been trying to cut back its European capacity, but ran into a political storm in October after announcing a plan to close two furnaces at its steel plant in Florange, France.

The move provoked an angry reaction from the French government, which accused the firm of breaking a 2006 commitment to keep the blast furnaces running, a claim denied by ArcelorMittal. It also criticised the firm for refusing to sell off the site as a whole.

France's minister for industrial recovery, Arnaud Montebourg, accused the steelmaker of "lying" and "disrespecting" the country. However, he retracted a remark that ArcelorMittal was no longer welcome in France.

More on this story

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