ArcelorMittal is trying to influence the situation on the steel market in the EU

During January-November, the company limited production in Belgium, Germany, Poland, France and Bosnia

The EU steel industry has recently been hit hard by falling prices and increased imports of steel products. Most companies have opted for unscheduled maintenance shutdowns or production cuts in this environment, including global steelmaker ArcelorMittal.

In September-November, the company suspended some production capacities at minimum six plants. These include blast furnaces, rolling lines and a coke oven battery in Krakow.

In mid-September, ArcelorMittal announced the shutdown of blast furnace A at Ghent, Belgium, plant for several months to replace the refractory lining. BF A was scheduled to be blown out on September 14 and restarted at the end of November 2023. The plant is equipped with two blast furnaces – A and B. BF B was fully repaired in 2021. Blast Furnace A is to be replaced with a new electric arc furnace soon.

In early October, the company announced that it would not restart one of its two blast furnaces in Fos-sur-Mer, France, after it was suspended for maintenance over the summer. Blast Furnace No. 1 will remain idle until at least the end of 2023 amid a weak steel market. Market conditions are currently not favorable for the plant’s two blast furnaces.

Some of the plants have already undergone scheduled maintenance and repair work, including ArcelorMittal Bremen. The German unit suspended blast furnace No. 2 for 30 days starting October 5, 2023, and BF No. 3 for 5 days starting October 9. In addition, the company’s sinter plant was shut down for 60 days starting October 1. All other units continue to operate.

On November 6, the company announced the completion of work on BF No. 2 and the start of the unit’s launch on November 9.

As the letter to customers noted, ArcelorMittal Hamburg plans to reduce production in the fourth quarter and introduce two shutdowns for a period of 5 weeks. The first shutdown is scheduled for October 27 to November 12, and the second one is scheduled for December 14 to 31. During this time, the entire plant will be shut down. Only a minimal number of employees will be working at the workplaces.

Recently, the company’s Polish subsidiary joined these enterprises. On November 16, ArcelorMittal shut down a wire rod production line at its plant in Sosnowiec, Poland. The first stage of the suspension is scheduled for November 18-26. This decision was made amid the difficult situation on the steel market in the country.

The unfavorable situation in the European sinter market caused the suspension of the High Oven blast furnace and rolling lines at ArcelorMittal Zenica (Bosnia and Herzegovina), as well as the mines that supply ore to the plant. The plant produces about 700 thousand tons of steel per year. Production is planned to resume once demand returns to a level that will ensure stable business operations.

On November 22, ArcelorMittal’s Polish unit announced the hot mothballing of its coke oven battery in Krakow amid low demand and negative trends in the price of coking coal and coke. All employees of the coke plant will remain at their jobs until the end of the year to prepare the plant for a safe shutdown.

«From time to time, ArcelorMittal shuts down its European plants, officially explaining this by weak demand for steel. In our opinion, the company is trying to raise prices in this way, realizing that imports are limited by quotas and consumers will still have to buy products from local producers,» said the GMK Center analyst Andriy Glushchenko.

In January-September 2023, ArcelorMittal’s European division reduced steel production by 11% compared to the same period in 2022 – to 22.2 million tons. Steel shipments decreased by 7.8% y/y – to 21.56 million tons.

The company predicts that in the fourth quarter, the negative impact on its performance will be caused by a reduction in production, in particular due to repairs at blast furnaces in Fos-sur-Mer (France), Bremen (Germany) and Ghent (Belgium).

In general, all divisions of ArcelorMittal in January-September 2023 reduced steel production by 3.1% compared to the same period in 2022 – to 44.4 million tons. In 2022, the company decreased the indicator by 14.6% y/y – to 55.9 million tons, in 2021 – by 3.3% y/y, to 69.1 million tons, in 2020 – by 20.3% y/y, to 71.5 million tons, and in 2019 – by 3% y/y, to 89.8 million tons.