Steel titan ArcelorMittal (MT) said Tuesday that it has proposed to idle its electric arc furnace and continuous caster at Schifflange, Luxembourg, for "an indefinite period of time" due to continued weakness in the European construction market.

ArcelorMittal Rodange & Schifflange, a unit of the world's largest steelmaker, said that labor unions have been informed about its intention to mothball the plant.

The Luxembourg-headquartered steelmaker said that 282 people would be affected by this proposal, out of a current workforce of 626 at both the Rodange and Schifflange sites. Some 220 people from Rodange and Schifflange have already been relocated to other sites, it said.

"Unfortunately the construction market, for which the products in Rodange and Schifflange are made, hasn't recovered from the downturn that started at the end of 2008 and there is still no sign of a meaningful improvement," said Nico Reuter, vice president of ArcelorMittal Long Carbon Europe.

The Schifflange steel plant has been idled since October 2011 as a result of the deteriorating European construction market.

ArcelorMittal has lost more than EUR100 million over the last three years from its Rodange and Schifflange operations and remains concerned about future demand given that current construction sector steel demand is around 20% below 2007 levels.

-By Alex MacDonald, Dow Jones Newswires; +44 (0)20 7842 9328; alex.macdonald@dowjones.com

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