The biggest steel maker in the world, ArcelorMittal has decided to reduce production of steel following slow demand due to global economic crisis. Its margin has been impacted due to slow demand by reality and automobile sector. Analysts of Citigroup Inc., Johan Rode and Peter Marcus has forecasted the decline in demand in the coming year. Many Russian, South Korean and Japanese steel giants have already decided to reduce production after noting decline in demand.

The chairman and CEO of ArcelorMittal, LN Mittal on Wednesday said that the company is planning to reduce production by 30 per cent besides scraping its growth plans temporarily due to the ongoing financial crisis. He ruled out any retrenchment drive by the company but hinted at rationalization of the work force in case slowdown continues.

ArcelorMittal had earlier decided to invest $50 billion to increase its steel capacity to 130 mt from 110 mt by 2012. Its net may drop about 48 per cent to $2.5 billion in the fourth quarter. However, Chief Financial Officer, Aditya Mittal hoped that normalcy would come at the beginning of New Year.