High energy prices could trigger an exodus of companies from Europe to destinations with lower energy costs such as the U.S.
ArcelorMittal has started negotiations with unions this week on a broad furlough scheme for the 8,300 workers at its Spanish mills in the face of weakening demand and soaring energy prices, a company spokesperson said on Friday. The world's largest steelmaker expects to reach an agreement within a couple of weeks to allow it to idle any of its plants in Spain for any period of time until the end of 2023, the spokesperson added. ArcelorMittal's Sestao steelworks near the northern city of Bilbao, which has an annual capacity of 700,000 tonnes, is already idle and the company also intends to shut one of its two blast furnaces in the Asturias region, with capacity of 2.3 million tonnes, from Sept. 28.
ArcelorMittal expects its steel production in Europe to fall by around 1.5 million tonnes in the fourth quarter compared with the year-earlier period as it idles capacity due to weakening demand and soaring energy prices, the company said. The world's largest steelmaker earlier this month said it would curb output in Germany, Poland and Spain, notably by halting one blast furnace in each country. Steelmaking is among energy-intensive industries grappling with mounting costs as reduced Russian gas supply upends the European market.