sharon sanders
Editor-in-Chief & President
09/02/2022 | ArcelorMittal Germany
High energy prices: ArcelorMittal shuts down two plants in Germany
The exorbitant rise in energy prices is having a massive impact on the competitiveness of steel production. In addition, there is weak market demand, a negative economic outlook and persistently high CO2 costs in steel production, which means that the EU trade defense measures are less effective.
ArcelorMittal is taking action in Germany because not all plants can be operated economically. From the end of September, the Group will shut down one of the two blast furnaces at the Bremen flat steel site until further notice. In the Hamburg long steel works, where ArcelorMittal produces quality wire rod, the direct reduction plant will also be shut down from the fourth quarter due to the current situation and the negative prospects. Short-time work is already in place in both plants, which must be expanded as a result of the upcoming measures.
Due to the tense situation, short-time work is already being applied at the production sites in Duisburg and Eisenhüttenstadt.
“The high costs of gas and electricity are a heavy burden on our competitiveness. In addition, from October there will be the gas levy planned by the federal government, which will continue to burden us," explains Reiner Blaschek, CEO of ArcelorMittal Germany and also responsible for the plant in Bremen. “As an energy-intensive industry, we are extremely affected. With gas and electricity prices increasing tenfold within just a few months, we are no longer competitive in a market that is 25% supplied by imports. We see an urgent need for political action to get energy prices under control immediately,” adds Blaschek.
dr Uwe Braun, CEO of ArcelorMittal Hamburg, adds: “We have already greatly reduced gas consumption. Among other things, we bought the pre-product sponge iron externally from America, for which we would otherwise have used natural gas locally. The plant has already reduced operations by around 80 percent. The extreme price increase for gas and electricity makes it impossible for us to continue to work profitably - which is why we now have to import all of the sponge iron with a higher CO2 footprint in order to at least be able to continue producing".
ArcelorMittal Germany demands similar relief rules in Europe, which is possible with a European industrial electricity price. A first step must be to adjust the design of the electricity market so that the price of natural gas is not the only decisive factor in determining electricity prices. Furthermore, the planned gas surcharge must not be applied to the spot market prices, which are already very high. These measures must be promoted with the highest priority in order to achieve an improvement in the situation as quickly as possible.
https://germany.arcelormittal.com/i...7b3&uTem=aaaaaaaa-aaaa-aaaa-aaaa-000000000042
High energy prices: ArcelorMittal shuts down two plants in Germany
The exorbitant rise in energy prices is having a massive impact on the competitiveness of steel production. In addition, there is weak market demand, a negative economic outlook and persistently high CO2 costs in steel production, which means that the EU trade defense measures are less effective.
ArcelorMittal is taking action in Germany because not all plants can be operated economically. From the end of September, the Group will shut down one of the two blast furnaces at the Bremen flat steel site until further notice. In the Hamburg long steel works, where ArcelorMittal produces quality wire rod, the direct reduction plant will also be shut down from the fourth quarter due to the current situation and the negative prospects. Short-time work is already in place in both plants, which must be expanded as a result of the upcoming measures.
Due to the tense situation, short-time work is already being applied at the production sites in Duisburg and Eisenhüttenstadt.
“The high costs of gas and electricity are a heavy burden on our competitiveness. In addition, from October there will be the gas levy planned by the federal government, which will continue to burden us," explains Reiner Blaschek, CEO of ArcelorMittal Germany and also responsible for the plant in Bremen. “As an energy-intensive industry, we are extremely affected. With gas and electricity prices increasing tenfold within just a few months, we are no longer competitive in a market that is 25% supplied by imports. We see an urgent need for political action to get energy prices under control immediately,” adds Blaschek.
dr Uwe Braun, CEO of ArcelorMittal Hamburg, adds: “We have already greatly reduced gas consumption. Among other things, we bought the pre-product sponge iron externally from America, for which we would otherwise have used natural gas locally. The plant has already reduced operations by around 80 percent. The extreme price increase for gas and electricity makes it impossible for us to continue to work profitably - which is why we now have to import all of the sponge iron with a higher CO2 footprint in order to at least be able to continue producing".
ArcelorMittal Germany demands similar relief rules in Europe, which is possible with a European industrial electricity price. A first step must be to adjust the design of the electricity market so that the price of natural gas is not the only decisive factor in determining electricity prices. Furthermore, the planned gas surcharge must not be applied to the spot market prices, which are already very high. These measures must be promoted with the highest priority in order to achieve an improvement in the situation as quickly as possible.
https://germany.arcelormittal.com/i...7b3&uTem=aaaaaaaa-aaaa-aaaa-aaaa-000000000042