European steelmaker forced to close plants due to Russian invasion

5 September, 02:48 PM
Lakshmi Mittal, CEO and co-owner ArcelorMittal (Photo:ArcelorMittal Ukraine)

Lakshmi Mittal, CEO and co-owner ArcelorMittal (Photo:ArcelorMittal Ukraine)

ArcelorMittal SA, one of the world's biggest steelmakers, said it plans to close two of its plants in Germany because of a sharp rise in electricity prices, The Wall Street Journal reported on Sept.

The shutdowns include a blast furnace in Bremen and a factory that produces wire rods in Hamburg.

"The high costs for gas and electricity are putting a heavy strain on our competitiveness," said Reiner Blaschek, head of ArcelorMittal's German division.

The Luxembourg-based conglomerate said it had already reduced gas consumption in Germany, but the higher costs made the work of the two companies unprofitable.

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The price of gas began to rise in Europe from the beginning of summer — and especially in August, as Russia limits supplies to the European market. On Sept. 5, gas prices skyrocketed 30%, as Gazprom refused to put the Nord Stream-1 pipeline into operation after allegedly preventive maintenance.

Earlier, ArcelorMittal separately announced the closure of a steel plant in Spain due to low demand.

Steel production is extremely energy-intensive as metallurgists have also been hit by efforts to cut emissions and lower metal prices, as slowing global growth weighs on order numbers.

Two blast furnaces in Germany and Spain produced about 3.65 million tons of steel last year. In total, the company produces about 70 million tons of steel per year.

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