News Companies ArcelorMittal Kryvyi Rih 1748 27 February 2026
The key reason is the energy crisis facing the company
ArcelorMittal Kryvyi Rih PJSC announced the forced suspension of production activities at its subsidiary, Foundry and mechanical plant LLC (LMZ). This was stated in the company’s press release.
The decision will take effect three months after the date of announcement. The company justified it by the current economic and market conditions in which the company operates in Ukraine amid a full-scale war.
«The key reason for this step is the energy crisis that our company is facing during wartime, in particular the extremely high cost of electricity in Ukraine,» ArcelorMittal Kryvyi Rih said.
The company added that constant attacks on energy infrastructure have caused electricity shortages and the need to import it at even higher prices. This has led to a significant increase in production costs and has worsened the economic viability of steel production.
The company noted that since the start of the war, the cost of electricity for industrial producers has nearly tripled. Specifically, it went from $120/MWh in the second quarter of 2024 (excluding VAT) to $230 in February 2026, hitting $370/MWh during peak hours.
Frequent power outages caused by damage to energy infrastructure as a result of attacks by the aggressor led to a significant drop in production at ArcelorMittal Kryvyi Rih. Due to the energy deficit in January 2026 (compared to November 2025), pig iron production fell by 30%, steel by 40%, and rolled products by up to 60%.
«Both of these aspects of the energy crisis make steel production economically unprofitable, which in turn leads to a lack of domestic orders for LMZ,» the company explained.
An additional negative factor was the European Commission’s decision to introduce a cross-border carbon adjustment mechanism (CBAM) from January 1, 2026, without any exceptions or transition period for Ukrainian producers. This led to the loss of the European market for a significant part of domestic steelmakers, critically affecting production volumes and the workload of individual divisions and capacities.
The introduction of CBAM without taking into account the realities of the war in Ukraine has disrupted ArcelorMittal Kryvyi Rih’s previous efforts to reorient sales to the EU market after the start of the full-scale war. The loss of the European market has worsened the situation with obtaining sufficient volumes of domestic orders to ensure the operation of the LMZ in the near future.
The decision to close the foundry and mechanical plant will affect more than 1,700 jobs. In total, together with the closure of the blooming shop and related production processes, the number of job cuts at the company will exceed 2,400. LMZ employees will receive job offers at ArcelorMittal Kryvyi Rih with the possibility of retraining at the employer’s expense. All other procedures and guarantees provided for by Ukrainian law will also be applied.
LMZ is a subsidiary of ArcelorMittal Kryvyi Rih, one of Ukraine’s largest machine-building enterprises and a powerful machine-building and repair-mechanical complex.
It should be noted that ArcelorMittal Kryvyi Rih will increase the prices of its rebar and wire rod by $50/t starting in March of this year. The main reason for this step, according to the company, is the extremely high cost of electricity in Ukraine.
