ArcelorMittal halts steel output at Romanian Hunedoara mill on high energy costs
ArcelorMittal has paused production at its Hunedoara steelworks in Romania from Feb. 14 until March 30 due to high domestic energy costs, a company spokesperson told Platts, part of S&P Global Commodity Insights, on Feb. 17.
“The company has been facing economic challenges in maintaining the operations of its mill at Hunedoara, due to the unsustainable cost of electricity in Romania,“ the spokesperson said. “The current energy pricing structure has created a near-impossible environment for industrial activities, threatening not only the viability of such businesses but also potentially affecting the economic stability of the Hunedoara region.”
Romania’s spot electricity prices have ranked among the highest in Europe over the past 18 months. Furthermore, the tax on electricity in Romania, including distribution costs, stands at Lei 184/MWh ($38.72/MWh). “In addition, the contractual penalty imposed for non-use of electricity purchased has increased by more than three times in the past year,” ArcelorMittal said.
In December ArcelorMittal Hunedoara introduced partial production stoppages to reduce costs. Since then, production has been running intermittently, determined by daily energy prices. If prices peak, there is no production on that day, ArcelorMittal said in the note.
ArcelorMittal Hunedoara is also seeking the support of the Romanian government to address the issues affecting the site’s operations and its employees.
The Hunedoara site comprises a mini-mill with an electric arc furnace, a ladle furnace, one continuous caster and a section rolling mill. According to the latest report from ArcelorMittal, the company produced 200.000 mt of crude steel in 2023.
Platts, part of S&P Global Commodity Insights, assessed Northwest European domestic HRC at Eur600/mt ex-works Ruhr Feb. 14, unchanged day over day.
ArcelorMittal Hunedoara reduces production amid lack of orders
Romania-based ArcelorMittal Hunedoara has reduced production from 9 December until the end of the year due to a lack of orders, the firm says in a statement filed with the Bucharest Stock Exchange.
“In accordance with the provisions of law and regulation, we inform you of the temporary reduction of the company’s activity,” the message says. “This has been made considering the economic difficulties faced by the company caused by the lack of orders.”
Employees affected by the move will be paid 75% of their base salaries during this period, it adds.
ArcelorMittal did not reply to Kallanish request for comment.
The Romanian firm took similar measures in 2022, also due to a lack of orders.
In 2020, it also stopped production temporarily due to the Covid pandemic.
Electric arc furnace-based Hunedoara, part of the ArcelorMittal Europe – Long Products division, produces sections, billet and merchant bar, employing 584 people and some contractors. The firm produces 200,000-300,000 tonnes/year of crude steel.
Hunedoara remained part of ArcelorMittal after the steelmaking group sold its flagship Romanian Galati steelworks to Liberty Steel in 2019.
Svetoslav Abrossimov Bulgaria
