ArcelorMittal is planning to partly close blast furnaces at two of its steelwork plants in Germany and one in Spain due to low demand and rising gas costs.
Reuters reported that the firm plans to close one of the two furnaces at its steel plant in Bremen from September to the end of this year, as well as the direct reduction plant at its Hamburg steel factory from the fourth quarter of this year.
The move would result in reduced working hours for employees at both sites.
ArcelorMittal Germany CEO Reiner Blaschek said: “The high costs for gas and electricity are putting a heavy strain on our competitiveness.
“On top of that, from October onwards, there will be the German government’s planned gas levy, which will further burden us.
“With a tenfold increase in gas and electricity prices, which we had to accept within 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.”
The firm is also looking to close a blast furnace at its plant in Asturias, Spain due to lower demand.
ArcelorMittal said higher gas prices caused by the Russia-Ukraine conflict are impacting the work at the two facilities.
This is making the two plants ‘unprofitable’, according to a report by The Wall Street Journal.
ArcelorMittal has already reduced its gas consumption in Germany and produced around 70 million tonnes of steel in total last year.
The firm’s blast furnaces in Germany and Spain have a combined annual steel production capacity of around 3.65 million tonnes.
In July this year, ArcelorMittal signed a deal to buy Brazilian steelmaker Companhia Siderurgica do Pecem (CSP), which is a joint venture between Vale, Dongkuk Steel Mill and Posco.