(с) shutterstock

The company is counting on an agreement that will allow the company to idle any of its plants in Spain for any period until the end of 2023

ArcelorMittal last week began negotiations with unions on a broad furlough scheme (temporary employment schemes, ERTE) for 8,300 workers at its Spanish plants. The company connected it to a decrease in demand for steel and a sharp rise in energy prices. Reuters reports about it.

The world’s largest steelmaker expects to reach an agreement within weeks that would allow the company to idle any of its plants in Spain for any period until the end of 2023.

In particular, the ArcelorMittal Sestao steel plant, which annual capacity is 700,000 tons, is already idle. The company also announced its intention to temporarily stop the operation of one of the blast furnaces at the plant in Asturias at the end of September 2022.

The corporation owns 11 plants in Spain, but does not plan to idle three plants (in Álava and Navarre) that produce welded steel pipes.

As Reuters notes, due to the deterioration of the economic situation, European steelmakers have faced a drop in demand, particularly from automakers. Consumers are buying cheaper steel outside Europe, where energy prices haven’t risen as fast and labour costs are lower. Also, the competitiveness of European steelmakers is affected by the increase in the price of CO2 emission quotas.

As GMK Center reported earlier, ArcelorMittal company predicted reducing its steel production in Europe in the fourth quarter of 2022 by 1.5 million tons compared to the same period of 2021. The reason for this is the underloading of capacities due to the decrease in demand for steel products and the energy crisis.

As GMK Center wrote before, ArcelorMittal Corporation has decided to temporarily stop the construction of a pellet plant in Kryvyi Rih. The total investment in the project was to be $250 million.

In total, ArcelorMittal’s capital investment in the first quarter of 2022 decreased by 14.5% compared to the first quarter of 2021 and by 53.8% compared to the fourth quarter, to $529 million.