ArcelorMittal Kryvyi Rih to shut down Foundry and Mechanical Plant due to high electricity costs, cut 1,700 jobs

PJSC ArcelorMittal Kryvyi Rih (AMKR, Dnipropetrovsk region) has announced the forced cessation of production at its subsidiary Foundry and Mechanical Plant LLC (LMZ).

According to a press release issued Friday, the decision to halt LMZ’s production activities, the facility is an auxiliary unit supporting AMKR’s core production, will take effect three months from the date of the announcement.

AMKR said the decision is driven by current economic and market conditions in which the company operates in Ukraine amid the full-scale war. The key reason for this step is the high cost of electricity in Ukraine. Ongoing attacks on energy infrastructure have led to electricity shortages and the need to import electricity at even higher prices, resulting in a significant increase in production costs and a decline in output. Due to electricity shortages in January 2026 compared with November 2025, pig iron production fell by 30%, steel production by 40%, and rolled products output by up to 60%.

"Compared with 2024, when we appealed to the government of Ukraine to urgently develop measures to curb electricity price growth and support mining and metallurgical producers, the electricity price has risen from $120 per MWh (in Q2 2024, supply excluding VAT) to $230 in February 2026, reaching up to $370 per MWh during peak hours," the press release states.

An additional negative factor was the decision of the European Commission to introduce CBAM (the Carbon Border Adjustment Mechanism) as of January 1, 2026, without any exemptions or transition period for Ukrainian producers. This led to the loss of the European market for a significant portion of Ukrainian metallurgical producers and critically affected their production volumes and the utilization of certain units and capacities.

"It is worth noting that AMKR made significant efforts to reorient sales to the EU market after the start of the full-scale war. In fact, this market was built from scratch under extremely difficult conditions. However, the implementation of CBAM without taking into account the realities of the war in Ukraine undermined these efforts. The loss of the European market worsened the situation with securing sufficient domestic orders to ensure LMZ’s operation in the near future," the press release explains.

The company said that the closure of LMZ will result in 1,700 job cuts, and together with the shutdown of the blooming mill and related production processes, total job reductions will exceed 2,400. At the same time, LMZ employees will receive job offers within AMKR with the opportunity for retraining at the employer’s expense. All employment benefits at AMKR will be preserved for those who accept the offers – stable wages, a social benefits package, and all other advantages. All other procedures and guarantees provided for under current Ukrainian legislation will also be applied, the press release concludes.

Foundry and Mechanical Plant LLC (LMZ) is one of the largest machine-building enterprises in Ukraine. The facility is a powerful machine-building and repair-mechanical complex that includes a number of engineering chains and such production sectors as foundry, forging and pressing, heat treatment, welding and surfacing, machining, metalworking and assembly, production of rubber and technical goods, mechanical repairs, and others.

ArcelorMittal Kryvyi Rih is the largest producer of rolled steel in Ukraine. It specializes in long products, in particular rebar and wire rod. The enterprise has a full production cycle, with capacities designed for annual output of more than 6 million tonnes of steel, more than 5 million tonnes of rolled products, and more than 5.5 million tonnes of pig iron.