By Jean Chua
Dec. 12 (Bloomberg) -- ArcelorMittal, Voestalpine AG and ThyssenKrupp AG dropped in European trading on concern the U.S. Senate’s rejection of a bailout for American automakers will slash demand for steel and worsen a global recession.
Luxembourg-based ArcelorMittal, the world’s biggest steelmaker, fell as much as 10 percent on the Amsterdam Stock Exchange. Metals and mining stocks also declined, with Vedanta Resources Plc down 6 percent, Xstrata Plc losing 4 percent, and Umicore, which makes catalytic converters for cutting pollution, dropping 7 percent. Platinum, used in autocatalysts, tumbled.
The Bloomberg Europe Metals & Mining Index slipped 3 percent as of 9:50 a.m. in London after senators voted down a bill to provide $14 billion of emergency funds for General Motors Corp. and Chrysler LLC. Metals and crude oil prices slumped.
“The U.S. has shown themselves to be sensible enough that they will bail this out some time,” said Angus Murray, chief executive officer of New York-based money manager Castlestone Management Ltd., in an interview with Bloomberg Television in London today. “It doesn’t mean, and this is a terrible thing to say, that General Motors shouldn’t go out of business.”
Steelmakers and mining companies across the world are cutting jobs and production as slowing economies erode demand for the metal from carmakers and builders. ArcelorMittal said Nov. 27 it may slash as many as 9,000 jobs, or 3 percent of its global workforce, to lower costs.
ArcelorMittal Slides
The company fell 1.33 euros to 17.375 euros, cutting its market value to 25 billion euros ($33 billion). ThyssenKrupp, Germany’s largest steelmaker, slid 4.9 percent to 16.25 euros in Frankfurt and Voestalpine dropped 5 percent to 15.51 euros in Vienna.
OAO Novolipetsk Steel, Russia’s biggest steelmaker by market value, today cut its 2008 production estimate by 11 percent and forecast weak demand through at least the first half of next year after a “sharp” drop in sales. The company fell as much as 8.2 percent in Moscow trading.
Platinum for immediate delivery lost as much as $28.50, or 3.4 percent, to $807.50 an ounce and last traded at $823.25 in London. The metal has plunged 46 percent this year.
Platinum miners in South Africa, accounting for almost 80 percent of world supply, need to curb production to shore up prices, Impala Platinum Holdings Ltd. Marketing Director Derek Engelbrecht said in an interview from Johannesburg today.
Auto sales in the U.S. dropped 37 percent in November from a year earlier, with cars and light trucks sold at the lowest annual rate in 26 years. A report yesterday showed initial jobless claims in the country surged to a 26-year high.
To contact the reporter on this story: Jean Chua in London at jchua4@bloomberg.net
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