ArcelorMittal Kryvyi Rih announced a deterioration in the situation with electricity, gas, and railway tariffs

ArcelorMittal Kryvyi Rih PJSC reports a further deterioration in the situation with energy and logistics costs, which continues to put pressure on the production economy. This was stated by the company’s CEO Mauro Longobardo in an interview with Interfax-Ukraine.

According to him, electricity remains a key problem for the plant. In January, the average price of electricity exceeded $220 per MWh, and in February it reached $230 per MWh, with peaks of up to $370. The problem lies not only in the high cost, but also in the instability of supply. Due to power cuts in January, the company temporarily shut down its blast furnaces, and one of the shutdowns lasted about a week due to damage to equipment after the cooling system stopped working.

Longobardo stressed that the current mechanisms for importing electricity did not have the expected effect for mining and metallurgical companies. In particular, the long-term auctions, on which the industry had pinned its hopes, did not ensure the reservation of the necessary volumes of resources for industry. At the same time, the plant is still obliged to purchase 60% of imported electricity, and there is talk on the market of a possible increase in this share to 90%, which the company considers an additional burden.

Natural gas costs have also risen significantly. ArcelorMittal currently purchases gas both in Europe and from Ukrainian producers. Whereas previously domestic gas was sold at the European TTF hub price or at a discount, the principle of import parity now applies – TTF plus a surcharge. In addition, gas transportation and storage costs have increased. According to the company’s estimates, these factors alone add about UAH 100 million to monthly expenses.

As a result, the share of electricity and natural gas in the plant’s production costs has already reached 40%, compared to about 18% in 2020. According to the plant’s manager, this sharply reduces competitiveness and prevents the plant from even reaching the break-even point.

As for railway tariffs, AMKR has so far managed to avoid their increase. Longobardo recalled that at the beginning of 2025, a 37% increase in Ukrainian Railways’ (UZ) tariff was discussed, but this did not happen thanks to the government’s decision to support the company in other ways. At the same time, the risk of a tariff review remains, and for loss-making enterprises, this will be another negative factor.

Earlier, ArcelorMittal Kryvyi Rih announced that it would increase the prices of its rebar and wire rod by $50/t starting in March of this year. The company cited the extremely high cost of electricity in Ukraine as the main reason for this move.