The gas and electricity prices have witnessed nearly tenfold surge within a period of few months.
SEATTLE (Scrap Monster): ArcelorMittal- the world’s second largest steelmaker announced its decision to stop operations at two of its European blast furnaces due to escalating energy prices and falling demand which makes the continuation of these operations infeasible.
According to the company announcement, its furnaces in northern Germany and near Gijon in northern Spain will cease to operate until further notice at the end of the month. With this, the company will now have only 14 operating furnaces in the region.
Commenting on the decision, Reiner Blaschek, CEO, ArcelorMittal-Germany noted that the high cost of gas and electricity have been weighing heavily on the steelmaker’s competitivity. The other reasons behind the closure include low market demand, negative economic perspectives and high carbon dioxide costs in steel production. The slowdown in automobile industry too has led to the decision.
It must be noted that the energy prices in Europe have been on the rise since the Russian invasion of Ukraine in February this year. The gas and electricity prices have witnessed nearly tenfold surge within a period of few months.
The steelmaker also announced that it will shut down the direct reduction plant at its Hamburg steel factory from the fourth quarter of this year.
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