The largest metallurgical plant is halting production at its factory. What is the reason?
27 February 18:32
ArcelorMittal Kryvyi Rih, Ukraine’s largest steel mill, is forced to suspend the production activities of its subsidiary, Livarno-Mechanical Plant LLC, which is a supporting division of the main production, ArcelorMittal Kryvyi Rih said, according to "Komersant Ukrainian".
This will result in the loss of 1,700 jobs. The decision is justified by the shortage of energy capacity, a 60% drop in rolled steel production, and the introduction of the CBA mechanism. The suspension of LMZ’s production activities will take effect three months after the date of the announcement. It is dictated by the current economic and market conditions in which the company operates in Ukraine in the context of full-scale war, AMKR explained.
“The key reason for this step is the energy crisis our company is facing during wartime, in particular the extremely high cost of electricity in Ukraine. Constant attacks on energy infrastructure have caused electricity shortages and the need to import electricity at even higher prices. This has led to a significant increase in the cost of production, which has further worsened the economic viability of metallurgical production,” ArcelorMittal Kryvyi Rih said in a statement.
The company emphasized that since the beginning of the war, the cost of electricity for industrial producers has almost tripled. Compared to 2024 alone, when AMKR appealed to the Cabinet of Ministers to urgently develop measures to curb the rise in electricity prices, its price has risen from $120 per MWh (second quarter of 2024 with delivery excluding VAT) to $230 in February 2026, reaching up to $370 per MWh during peak hours.
The metallurgical plant also reported that frequent power outages had led to a significant drop in production.
Due to the electricity shortage in January 2026 compared to November 2025, the following was observed:
— a 30% decrease in pig iron production;
— a 40% decrease in steel production;
— a 60% decrease in rolled steel production,” AMKR said, stressing that all these aspects of the energy crisis made steel production economically unprofitable, which, in turn, led to a lack of domestic orders for LMZ.
“An additional negative factor was the European Commission’s decision to introduce CBAM (Cross-Border Carbon Adjustment Mechanism) from January 1, 2026, without any exceptions or transition period for Ukrainian producers. This led to the loss of the European market for a significant part of Ukrainian metallurgical producers, which critically affected the production volumes and capacity utilization of individual divisions and facilities,” the company said.
The closure of LMZ will result in the loss of 1,700 jobs. Taking into account related processes, in particular the shutdown of the blooming shop, the total number of jobs lost will exceed 2,400.
The company notes that the plant’s employees will receive offers of employment in other divisions of the company. The employer undertakes to provide retraining for personnel, maintain social benefits, privileges, and stable wages in accordance with Ukrainian law.
Livarno-Mechanical Plant LLC is a machine-building complex consisting of seven workshops (foundry, mechanical, metal structures, etc.). The enterprise provided a full cycle of repair and mechanical work, including heat treatment, welding, and the manufacture of rubber products for the needs of the metallurgical industry.
In January, the Kryvyi Rih Mining and Metallurgical Plant PJSC ArcelorMittal Kryvyi Rih partially stopped production due to a blackout caused by a massive Russian attack on the energy sector on January 7.
“In this regard, we had to temporarily suspend part of the production processes. This was done safely in accordance with internal technological regulations. We are doing everything possible to return to normal production,” the company explained.
Earlier in September 2025, ArcelorMittal Kryvyi Rih announced that it was considering a possible exit from Ukraine due to disproportionate increases in electricity tariffs, which make steel production unprofitable. The company explained at the time that the plant was staying afloat solely thanks to the large-scale support of its parent company, ArcelorMittal, which had invested $1 billion in its Ukrainian division since the start of the war, including $650 million in the first year. However, according to the CEO, at least $150 million in investments are needed each year to keep the plant running.
ArcelorMittal Kryvyi Rih is the largest producer of rolled steel in Ukraine. It specializes in the production of long products, in particular, rebar and wire rod.
ArcelorMittal owns Ukraine’s largest mining and metallurgical plant, ArcelorMittal Kryvyi Rih, and a number of small companies, including ArcelorMittal Beryslav.
