ArcelorMittal, the world’s largest steel manufacturer, announced yesterday the shutdown of several blast furnaces and other facilities in Germany and France, including an iron ore direct reduction plant such as the one planned in Veriña (Gijón) to decarbonise Asturian factories.
With both decisions, the multinational executes plans to cut production activity in three European countries as a result of the difficulties the sector is going through and which were already invoked the day before yesterday by the company to justify the shutdown for three months – starting on the 28th – of the blast furnace A in Gijón.
Arcelor will close in Germany from the end of the month, and “until further notice”, one of the two blast furnaces in the Bremen flat products area, as well as the direct reduction plant (DRI) of the Hamburg long products division , which will cease its activity during the fourth quarter. In addition, the part-time work that is already being applied will be extended due to “the tense situation” of the business in the Duisburg and Eisenhüttenstadt production centers.
In the case of France, the company notified temporary adjustment measures at the Dunkerque site, in the north of the country. Of its three blast furnaces, only one will remain active. Furnace number 3 will undergo maintenance work and number 2 has been shut down since July for the decarbonization of the complex’s manufacturing process. In addition, the multinational will close a sintering line and two galvanizing lines. To minimize the labor impact, the Dunkerque management said that it plans to reduce the hiring of temporary workers, apply early leave, benefit from partial activity depending on the sectors and implement training and reliability improvement plans.
It is not ruled out that ArcelorMittal decides on more plant stoppages in other European countries.
Asturias
In the case of Asturias, the shutdown of one of the two blast furnaces in Gijón (A) will mean that one of the two sinters that treat the iron ore before it is incorporated into the furnaces will be dispensed with. The sinters will operate alternately and, once the scheduled shutdown of one of them takes effect, the other will follow alone.
The company is evaluating various labor flexibility options to apply when the furnace stops. Arcelor no longer has the temporary employment regulation file (ERTE) agreed with the unions that allowed it to take advantage of it to face temporary problems of falling demand or other vicissitudes. The management of the Asturias manufacturing complex is analyzing several alternatives, which it will communicate to the unions in the coming days. Union representatives explained that the company had ruled out traumatic measures, although the centrals expressed their concern until these unknowns are cleared up.
Affectation
The Avilés steelworks and factory will be the most affected by the reduction in pig iron production in the Gijón furnaces. The activity of the Gijón long products division (rail and wire rod) was reduced by its structural difficulties and the market situation, and it had adapted to the adverse circumstances. In August, the Gijón steelworks was shut down. And for its current volume of business, this division has a number of orders that, without being buoyant, would reasonably guarantee the maintenance of its current activity rates.
The greatest incidence is therefore expected in the Avilés flat products division, which will affect the LDA steelworks, the cold rolling mill and the galvanizing line, for whose products there is a lower demand. The forecast is that the Avilés steelworks will receive less pig iron from Gijón once Furnace A stops.
300 people work in the two blast furnaces in Gijón, of whom around 125 or 150 could be affected by the stoppage. The Avilés facilities involved have a total of 1,500 jobs, although the degree of impact has not been specified.
The decrease in production in the Asturian capital will affect the factories of Sagunto (Valencian Community), Etxebarri (Vizcaya) and Lesaca (Navarra), which receive production from Asturias for transformation.
Three months
ArcelorMittal is confident of reversing the shutdown of blast furnace A in January. Market data point to a sharp drop in orders in the fourth quarter due to the slowdown in Europe and the uncertainty weighing on many steel-consuming sectors, which is why capacity will be adjusted to prevent further deterioration in the results. It is expected that many consuming sectors will resort to their “stocks” of steel in the final stretch of the year, as usual to close their balance sheets, which will further aggravate the drop in orders.
For this reason, the company believes that the cut in pig iron production (intermediate material for obtaining steel) could be higher than the 25% estimated by some labor sources in the next quarter, who were confident that blast furnace B could be to full production, going from the current 4,000 tons per day to 6,000 or 6,500, and thus partially offset the loss of the 4,000 tons that A.
However, the company’s expectations are that from January (and barring a serious deterioration in the economy) there will be an increase in demand both to meet the production needs of the sectors that consume steel and to rebuild their inventories once depleted. their “stocks”.
“The company guarantees me that the problem does not affect the decarbonisation plan” of the Asturian plants, says Barbón
Maria Villoria / J.C.
Arriondas / Oviedo
“The company guarantees me that the decision responds exclusively to the market situation and that nothing affects the decarbonization plan that it has to develop. This is what it has transmitted not only to the Government of Asturias but also to the Ministry of Industry,” said the Asturian president, Adrián Barbón, in Arriondas. The Asturian president reiterated that “an environmental tariff must be set so that when products enter the European Union and are cheaper because they do not meet environmental quality” they assume that requirement. “I know that the Government of Spain is defending it. I defended it in my investiture debate and today I defend it again: Europe also has to move with the price of energy”, he pointed out. Barbón maintained that “although the price of energy is high in Spain, it is infinitely less than what is being paid in the rest of Europe. We must reform the electricity market at European level and the marginal system of setting prices.” Yesterday, the Asturian Federation of Entrepreneurs (FADE) favorably assessed the company’s commitment to the decarbonisation plan (for which it demanded that the “approval and delivery of community funds” be “accelerated”) and trusted “a prompt return to the production of blast furnace A”, whose stoppage he linked to “the freedom that companies have to manage times like the one we are in, and which the steel company described as “very adverse”, due to low demand and high levels of imports non-community”. FADE called for recovering the system of uninterruptibility or payment for capacity for electro-intensive plants, “pressuring the EU” to apply “a border adjustment that prevents European products from competing unequally with others produced with lower environmental and social requirements” and “prolong the free emission rights as much as possible”. Teresa Mallada, president of the Asturian PP, reiterated yesterday that “Barbón has to explain the risk that exists for electro-intensive industries.”