ArcelorMittal South Africa announced on Thursday that it hopes for a reduction in interest rates during the second part of the year, after its losses increased due to weakened demand.

The company lost 1.11 billion Rand ($60 million), compared with a 448 million Rand loss in the previous six-month period.

The company has also been affected by the operational disruptions of two blast furnaces in Vanderbijlpark.

The first-half crude steel production fell 10%, to 1.2 millions metric tons. Sales volumes dropped 2%, to 1.2million tons. Actualized rand prices fell 3%.

The company stated that "domestically the possibility of interest rate reductions as well as the focus of the Government of National Unity on building infrastructure may provide much-needed support for the dynamics of the local market."

A poll suggests that South Africa's Central Bank will cut its interest rate by a further 1% in November.

The South African steel company has decided not to shut down a plant this month. They cited improvements in the availability of electricity, efficiency at the port and railway, as well as lifting the ban on exporting scrap.

The parent company ArcelorMittal SA is the second largest steelmaker in the world. The world's No. 2 steelmaker ArcelorMittal SA reported that its core profit for the second quarter fell 38% due to low steel prices, despite being above expectations. Reporting and editing by Edwina G. Gibbs. $1 = 18.2257 Rand.

(source: Reuters)