Ukraine’s steel giant is shutting down one of its divisions: what caused it
17 March 10:09
Ukraine’s largest steel mill, ArcelorMittal Kryvyi Rih, has announced the completion of its production campaign at the blooming shop. The company has been forced to optimize production due to the difficult economic situation, rising electricity rates, and new European regulations. This information was released by the company’s press service, according to "Komersant Ukrainian"
All planned operations in this shop have been fully completed.
Why the company is shutting down the shop
The company explained that the decision was part of anti-crisis measures aimed at preserving the company’s financial stability amid the war.
Among the key reasons:
- a sharp rise in electricity costs
- the difficult economic situation in Ukraine
- the introduction of the CBAM mechanism in the EU
- reduced access to European markets.
The company noted:
“In response to the difficult economic conditions during the war, including a significant increase in electricity prices and the introduction of CBAM, the company is forced to implement measures to improve efficiency and financial viability.”
How electricity prices have changed
One of the main factors was the energy crisis. According to the company, the cost of electricity for industry has nearly tripled since the start of the full-scale war.
Specifically:
- in the second quarter of 2024 — about $120 per MWh
- in February 2026 — already about $230
- during peak periods — up to $370 per MWh
This has significantly increased the cost of metallurgical products.
What will happen after production stops
The company reported that the blooming mill has already produced the necessary stock of billets—approximately 150,000 tons. These resources are planned to be used for the further production of finished products.
Specifically, the billets will be processed on rolling mills to produce:
- rebar
- round bars
- square bars
- angle
- metal strips.
At the same time, some of the rolling mills that operated exclusively with billets from this shop may also cease operations.
Comprehensive transformation of the rolling department
In parallel, the company is continuing a large-scale transformation of its rolling operations in response to the introduction of CBAM and the rapid rise in electricity prices, which are the highest in Europe.
As part of this process, the company will consolidate rolled steel production onto a smaller number of mills that align with existing production flows and the sizes of billets available for processing.
Potential job cuts
The transformation of the rolling department will result in the elimination of approximately 1,000 jobs.
And the total number of staff reductions as part of anti-crisis measures could reach up to 3,400 employees.
At the same time, the company stated that it will strive to retain key specialists as much as possible and transfer some employees to other positions.
The company’s next steps
ArcelorMittal Kryvyi Rih reported that the production transformation will proceed in phases. The company promises to announce information about upcoming changes after the completion of the technological stages of modernization.
The crisis in Ukraine’s steel industry
The Ukrainian steel industry continues to face a difficult period due to:
- the loss of some export markets
- logistics issues
- rising energy costs
- the consequences of the war
The steel industry has traditionally been one of the key sectors of the Ukrainian economy, so changes in the operations of large enterprises can affect the country’s economic situation.
