ArcelorMittal Kryvyi Rih to Shut Second Plant This Year, Affecting 2400 Workers

Foundry and Mechanical Plant Closure

According to Главком: ArcelorMittal Kryvyi Rih, Ukraine's largest steel producer, has announced it will close its Foundry and Mechanical Plant in three months. This marks the second major facility shutdown by the company in 2026, with the combined actions impacting over 2400 jobs. The decision is driven primarily by an energy crisis, caused by attacks on the national power grid, and the European Union's implementation of the Carbon Border Adjustment Mechanism (CBAM) which began in January. This situation highlights the severe pressures facing heavy industry in Ukraine amid the ongoing war.

The company had already halted another production line in January, underscoring its mounting operational challenges. During January and February, electricity demand in Ukraine exceeded supply by 30%. This power deficit caused ArcelorMittal Kryvyi Rih to lose roughly 10% of its pig iron output and over 25% of its rolled steel production in January alone. Soaring electricity costs in the country have also drastically increased production expenses, further undermining the economic viability of steel manufacturing.

Broader Economic Impact

The energy shortfall is affecting the nation's broader economic outlook. The National Bank of Ukraine has revised its GDP growth forecast down from 2% to 1.8%. Meanwhile, leading analytical firms offer even more conservative estimates: Dragon Capital projects 1% growth, while ICU forecasts just 0.8%. ICU analysts estimate that 20-25% of Ukraine's economic output depends on a stable power supply.

Compounding the internal strain, external factors are also at play. In February, 68% of Ukraine's electricity imports came from Hungary and Slovakia, indicating significant reliance on neighboring countries to stabilize its grid. These combined factors-the plant closures, energy dependency, and reduced GDP forecasts-point to deep-seated issues within Ukrainian industry and the overall economy, emphasizing the urgent need to resolve energy security for business continuity.

The closure of ArcelorMittal Kryvyi Rih's Foundry and Mechanical Plant is a stark warning for Ukrainian industry as it grapples with immense energy challenges. Reduced production and soaring electricity prices threaten the country's economic stability, notably through a lower GDP. Solving the energy crisis has become critically important for reviving industry and safeguarding jobs in Ukraine.