ArcelorMittal is looking to close its Tailored Blanks steel site in Birmingham, England, it told employees at the facility yesterday.
"With EU demand for vehicles considerably reduced and a weak long-term forecast for recovery in demand, as well as lower levels of UK car production, a strategic review of the business has concluded that ArcelorMittal Tailored Blanks in Birmingham is not sustainable for the long-term," the company told Argus.
ArcelorMittal Tailored Blanks supplies laser-welded and unwelded blanks to the automotive industry and has sites in Belgium, France, Germany, Slovakia, Spain and the UK.
Tailored blanks are a less popular solution in the automotive industry than they once were, according to steel suppliers. Hot-formed finishing is being used more often, which allows for a more aesthetic finish than tailored blanks, enabling the use of a single sheet without the welded joint where different sizes are joined.
Sources at ArcelorMittal downstream facilities suggest they have faced problems with coil availability this year, as the mill has tried to catch up on backlogs since demand started to snap back from the third quarter of last year.
Tailored Blanks Birmingham's revenue fell by 26pc on the year in 2019, to £34.87mn ($48.64mn) from £47.14mn, according to its latest annual results filed with Companies House. The decline was driven by lower UK automotive production, while tonnage fell by 32pc, to 34,000t from 50,000t.
The firm operates under a transfer-pricing agreement with its parent company, ArcelorMittal Tailored Blanks NV, enabling it to sell all its stock at an agreed transfer price, based on cost plus a 2-4pc mark-up. As the parent company is its only customer, and the agreement can be modified or withdrawn without notice, "there is a material uncertainty which may cast significant doubt as to the company's ability to continue as a going concern", the latest results filing said.
