Warsaw — ArcelorMittal Poland said Oct. 8 it will permanently close the blast furnace and steel plant in Krakow this month due to reduced demand caused by the COVID-19 pandemic.
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"The COVID-19 pandemic has had unprecedented consequences for the European steel industry. Although demand in recent weeks has revived somewhat – mostly driven by inventory corrections – it is still considerably below pre-Covid levels," Sanjay Samaddar, CEO of ArcelorMittal Poland said in a statement.
"This means we have to take some very difficult decisions, which will regrettably mean the closure of the blast furnace and steel shop in Krakow," he added.
ArcelorMittal said high energy costs, rising carbon prices and a lack of emergency trade measures coupled with the European Commission's recent decision to further increase the quota of tariff-free steel imports from outside the EU at a time of falling demand had also influenced the company's decision.
"Taking all these factors into consideration, we have taken a decision to concentrate the production of hot metal in our two blast furnaces in Dabrowa Gornicza, to improve our cost competitiveness," Samaddar said.
The company said the shutdown of the Krakow blast furnace and steel shop will begin this month and will last a few weeks. In 2018, the Krakow plant produced about one third of the company's 5.2 million mt of crude steel in Poland.
Krakow's furnace and steel shop were temporarily idled in November last year due to the market downturn. Since then, the majority of the affected employees have been either redeployed to other ArcelorMittal Poland plants or put into temporary unemployment. Samaddar said the company would work with trade unions to reach a compromise for affected workers.
The company's coke plant in Krakow will continue to operate as well as two rolling mills, the hot dip galvanizing line and the new organic coating line. The company has invested about Eur 110 million in Krakow's downstream operations over the last five years.
Slabs for the Krakow rolling mills will now be sourced from the Dabrowa Gornicza steel shop, where the company will invest Eur 40 million in debottlenecking projects.