ArcelorMittal has struck a deal that would allow it to lay off up to 40 per cent of its 12,000 workers in Spain until at least the end of the year in the starkest sign yet that the world’s biggest steelmaker is preparing for a prolonged slowdown.

Global demand for steel this year is expected to fall by at least 15 per cent, making the year-on-year drop the worst for 60 years. ArcelorMittal – which accounts for nearly 10 per cent of world production – has been among the worst hit groups, cutting output at most of its plants by up to half.