ArcelorMittal Kryvyi Rih to reduce capacity due to rising electricity prices and slowing exports

PJSC ArcelorMittal Kryvyi Rih, a subsidiary of the global steel producer ArcelorMittal, plans to reduce production in Q4 2024, in particular, to leave only one blast furnace in operation – BF No. 8, and 2-3 sintering machines. Mauro Longobardo, CEO of the enterprise, stated about it.

The company is forced to adjust the level of production due to unfavorable conditions on the global market, the decline in prices for iron ore raw materials and steel both in Ukraine and in the world, as well as the increase in electricity prices.

«If we don’t do this, it will lead to even greater losses,» emphasizes the CEO of ArcelorMittal Kryvyi Rih.

Coke production in October-December will work according to the needs of the steel division. The converter shop and continuous casting machines (CCMs) will be stopped for 45 days. At this time, all the pig iron will be poured on the pouring machines (PM) of blast furnace shop No. 1 (BF-1). In the second half of December, 1 converter and CCM No. 1 will remain in operation. Surplus pig iron will be spilled at PM BF-1. The company plans to enter the year 2025 with one blast furnace, one converter and CCM No. 1.

During downtime, the equipment of the steelmaking and rolling mills will be subject to major repairs and modernization.

“Despite the fact that we continue to experience acute shortages and attrition, mainly caused by mobilization, we managed to increase the staffing level by 5% and reduce the attrition rate slightly. At present, the average level of staffing in the enterprise is 86%. In the current situation, we have focused our efforts on the completion of critically important professions of technological and repair personnel, as well as attracting women to work. We are working hard to overcome the shortage of personnel. Women and youth are the focus of our communication,» Longobardo said.

At the same time, according to him, the change in production plans will not lead to staff reductions. The personnel of the production divisions, whose production volumes will be adjusted, are planned to be involved in repair work, security and improvement of the territory.

«We continue to monitor the market situation and are ready to quickly increase production volumes if the cost of electricity in Ukraine is at least equal to the European one or the demand on the European sales market increases,» the general director of the company summarized.

As GMK Center reported earlier, it is becoming more and more difficult for Ukrainian iron and steel companies to compete in global markets, in particular, due to the constant increase in production and logistics costs. An additional factor of pressure was the deterioration of the market situation and the decrease in prices for ferrous metals and steel. Amid this, a further decrease in product prices may make supplies from Ukraine economically unprofitable.

According to GMK Center’s estimates, by the end of the year Ukraine may lose 16% of its export of pig iron (200,000 tons), 13% of its export of semi-finished steel (150,000 tons), 8% of its export of flat rolled products (100,000 tons), and 14% of its export of long rolled steel (50 thousand tons).