ArcelorMittal has refused to rule out further plant closures in Europe as the global steel industry enters what some observers fear could be a five-year spell of overcapacity linked to signs of a severe slowdown in demand and consumption in China.

The unwillingness by the world’s biggest steelmaker to confirm previous pledges that it would keep its main European factories open has sparked speculation that it might be preparing to announce permanent shutdowns of some of its smaller units on the continent.

Lakshmi Mittal, chairman, chief executive and main owner of the company, told the Financial Times that the “sustained collapse in European [steel] demand has created a severe imbalance with potential supply [of the metal]” and that the overall problems for the world economy remained “very concerning”.