ArcelorMittal Poland temporarily idles the operation of the blast furnace and steel plant at its Krakow unit
ArcelorMittal Poland informs that the company is forced to temporarily idle the primary operations in Krakow on November 23, 2019. Previously, the company had postponed its earlier decision to idle the operations from September 2019, by taking exceptional measures to adjust the capacity utilization of the three blast furnaces – one in Krakow and two in Dabrowa Gornicza - to lower demand levels.
ArcelorMittal Poland has idled the blast furnace and steel shop in Krakow before. The installations did not operate from August 2010 to March 2011 and were successfully restarted once the market improved.
- Our three blast furnaces are now working at their technological minimum so we cannot reduce production volumes any further. As the situation on the steel market continues to deteriorate and the outlook remains gloomy, we regrettably have no choice but to temporarily idle the blast furnace in Krakow – comments Geert Verbeeck, CEO and chairman of the board of directors at ArcelorMittal Poland.
The steel sector globally is dealing with a huge overcapacity exceeding 400 m tonnes. According to EUROFER, apparent steel demand in Europe is expected to fall by 3.1% in 2019 whilst earlier forecasts only pointed to a drop of 0.4%. This results from uncertainty, trade tensions and geopolitical issues weighing on investment and trade.
- Manufacturing, particularly the auto industry, has performed poorly, contracting in many EU countries - in Germany production of passenger cars declined by as much as 11%. This market contraction and the global overcapacity are putting additional pressure on prices of finished goods in an environment in which prices of raw materials, notably iron ore, remain high – explains Geert Verbeeck.
ArcelorMittal Poland maintains its earlier position on the company’s intention to restart the blast furnace and the steel shop in Krakow as soon market conditions improve adequately to justify a restart leading to economically viable operations.
The company also reiterates its previous declarations with regards to employment.
- We have found solutions for all ArcelorMittal Poland’s employees affected by this decision. We will also be taking advantage of economic unemployment but as an exception rather than a rule since a great majority of our employees will be offered other positions both at our other plants in Krakow as well as in Dabrowa Gornicza – comments Monika Roznerska, HR director at ArcelorMittal Poland.