ArcelorMittal SA is idling parts of three steel plants as high energy costs and weaker demand make production uneconomic.
(Bloomberg) —
ArcelorMittal SA is idling parts of three steel plants as high energy costs and weaker demand make production uneconomic.
Facilities run by Europe’s biggest steelmaker in Bremen and Hamburg in Germany will be partly shut at the end of the month, according to a statement from ArcelorMittal on Friday. A blast furnace at its plant in Asturias, Spain will also be idled.
“The exorbitant rise in energy prices is having a massive impact on the competitiveness of steel production,” the company said in the statement. “This is compounded by weak market demand and a negative economic outlook.”
Russia’s squeeze on gas shipments to Europe is pushing up energy costs, crippling heavy industries that are simultaneously receiving fewer orders from manufacturers and builders which are also being hit. Steel demand is dropping on the continent, a sign of the deteriorating economic outlook.
That may mark the end of a period of bumper profits for Europe’s long-suffering steel industry. A rapid economic recovery from the pandemic saw steel prices to surge to record levels, with ArcelorMittal last year posting its highest profit since the financial crisis.
The company is calling for a change to the design of the electricity market to decouple power costs from natural gas. It also doesn’t want Germany’s planned gas levy to be applied on top of currently high spot prices.
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