The reported move comes on the heels of the steelmaker selling its blast furnaces in the US.
Luxembourg-based steelmaker ArcelorMittal reportedly is preparing to permanently idle its blast furnace production in Krakow, Poland. The move comes on the heels of its sale of blast furnace and basic oxygen furnace (BOF) assets in the United States in late September and could be tied to a net-zero carbon emissions pledge made by the steelmaker recently.
ArcelorMittal Poland (AMP) will close its Krakow melt capacity “for good” later this year, according to a report by London-based Kallanish Commodities. AMP had idled one blast furnace in late 2019 and is now preparing to shut down the second “after [steel] demand failed to recover to satisfactory levels,” according to the news outlet.
Kallanish also says ArcelorMittal is citing “insufficient European Union market protection from imports, high energy costs and the burden on EU mills of carbon emissions costs as being behind the move.”
The emissions-related costs could be leading to what AMP reportedly calls “carbon leakage, meaning the shifting of steelmaking to countries outside the EU that are not part of the Emissions Trading System,” according to Kallanish.
An AMP coking plant and downstream operations in Krakow will continue to operate, according to the report, with steel labs bring brought in from another mill in Dabrowa Gornicza, Poland.
AMP plans to invest 180 million Polish zloty ($47.2 million) into its flagship plant to increase capacity and enable production of grades used for grain-oriented steel.
ArcelorMittal has not completely backed away from BOF production, with the firm having announced the restart of blast furnace operations in the second half of 2020 in Brazil, France, Spain and South Africa.
On September 30, the steelmaker announced its “commitment to being carbon neutral by 2050,” following a September 18 announcement that it “welcomes the European Commission’s policy proposals to support a new emissions reduction target” in the EU.
In the US, two months before selling its BOF assets to Cleveland-based Cleveland-Cliffs, ArcelorMittal announced it was building a 1.5-million-ton-per-year electric arc furnace (EAF) mill in Alabama. The steelmaker has retained possession of that under-construction melt shop.