ArcelorMittal to Stop Blast Furnace in Poland. „Very Bad News”

The situation of the Polish energy system

On Thursday, Arcelor Mittal Poland (AMP), the largest steel producer in Poland, declared a „temporary closure” of blast furnace number 3 located in Dąbrowa Górnicza. The motivations behind this decision include soaring energy costs and CO2 emission prices, alongside inadequate market safeguards. „Very bad news,” commented Wojciech Saługa, Marshal of the Silesian Voivodeship.

Wojciech Koszuta, the CEO and president of AMP, was quoted in the announcement, highlighting that the company is navigating through exceptionally tough circumstances, exacerbated by several adverse factors. This includes excessively high energy prices, the burden of CO2 emission allowance purchases being shouldered solely by European manufacturers under the EU ETS, and a lack of robust market protection mechanisms.

„This situation has led to a significant influx of underpriced steel products entering Poland. Additionally, we have observed a notable decline in prices over the past three months. All these elements have adversely affected our profit margins, rendering the operation of two blast furnaces economically unsustainable under the current conditions,” Koszuta stated.

„Very bad news”

In response to the company’s announcement for PAP, Marshal of the Silesian Voivodeship Wojciech Saługa referred to the impending government restructuring, which will see the dissolution of the Ministry of Industry. This ministry has been responsible for the steel sector and has been formulating a strategy for the industry since the beginning of this year.

„This is very bad news for the operation of the Silesian Voivodeship and the security of Poland’s resources. It poses a significant challenge for the incoming minister. Which one, specifically?” questioned Marshal Saługa.

AMP references data from the Polish Steel Industry and Commerce Chamber, indicating that imports now account for 80 percent of the apparent consumption of steel products in Poland. For flat products, including sheet metal coils, this figure escalates to 95 percent.

AMP representatives highlight that in the flat product sector, the quantity of steel imported from Ukraine and Serbia is rapidly increasing, with shipments also arriving from countries such as Indonesia, Saudi Arabia, and Taiwan.

They are waiting for conditions to improve

AMP has stated that the preparatory work for the safe shutdown of Furnace No. 3 will take several weeks, with expectations for the closure to commence in September. The company has indicated that it will diligently observe market conditions to restart the facility as soon as the situation allows.

AMP representatives assure that they will make every effort to provide employment for all individuals working at blast furnace number 3 during the period of closure.

Currently, two blast furnaces are operational in Dąbrowa Górnicza – No. 2 and No. 3. The last temporary closure of blast furnace No. 3 occurred in October 2022, also influenced by market conditions, and the facility resumed operations in January 2023.

The largest steel producer in Poland

AMP stands as the largest steel producer in Poland, accounting for roughly 50 percent of the production capacity within the Polish steel sector. The company operates five steel mills, including one in Kraków, which houses Europe’s most advanced hot rolling mill, and others in Dąbrowa Górnicza, Sosnowiec, Świętochłowice, and Chorzów.

The group also encompasses Zakłady Koksownicze Zdzieszowice, the leading coke producer in Poland and Europe. AMP employs over 9,000 individuals, including those in its subsidiaries.

The company manufactures long, flat, and specialized steel products, as well as semi-finished goods for industries such as construction, household appliances, and transportation.

The new ministry will deal with industry

On Wednesday, Prime Minister Donald Tusk announced the creation of a new Ministry of Energy, led by Miłosz Motyka, which will tackle issues previously handled by the Minister of Industry and, to a certain extent, the Minister of Climate and Environment.

A second overarching ministry for finance and economy will also be established, led by the current Finance Minister Andrzej Domański. Furthermore, Wojciech Balczun will take charge of the Ministry of State Assets.

At the end of June this year, the sitting Minister of Industry, Marzena Czarnecka, announced that the action plan for the sustainable development of the steel industry in Poland, which has been developed in her ministry, is set to be completed by September 26, 2020. This document is intended to serve as a foundation for further coordinated measures to enhance the steel industry’s situation.

A cross-ministerial group focused on solutions for the steel sector has been engaged in drafting the „Action Plan for the Sustainable Development of the Steel Industry” since the start of the year. The 30-page draft was made public on June 13th of this year, initiating pre-consultation discussions involving representatives from other ministries, the social sector, and employers.

From the outset, the cross-min

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