Shares in Arcelor-Mittal SA, the steel producer controlled by Indian conglomerate Arcelor-Mittal, touched a five-year low on the Johannesburg Stock Exchange yesterday before recovering in afternoon trading.
ArcelorMittal SA shares touched a low of 5,617c — a level last seen in 2006, before regaining some ground to finish one per cent higher at 5,830c.
A trader described sentiment for ArcelorMittal SA as “brittle”, following news of serious production losses at its Newcastle plant, which was recently damaged when a dust catcher collapsed and seriously damaged the blast furnace.
The market appears to be critically assessing the accident after ArcelorMittal SA suggested that damage to the Newcastle plant could cause around 4,00,000 tonnes of lost production. ArcelorMittal’s production loss estimate was considerably higher than the initial 3,00,000 tonnes of lost production estimated by the market earlier this month.
A loss of 4,00,000 tonnes of production is roughly equivalent to the Newcastle plants annual production of 1,6 million tonnes. ArcelorMittal SA also noted the financial impact of the accident would be “substantial” — an admission is likely to spook the market.