ArcelorMittal Poland said it will permanently close the blast furnace and steel plant in Krakow this month due to reduced demand caused by the COVID-19 pandemic.

“The COVID-19 pandemic has had unprecedented consequences for the European steel industry.

Although demand in recent weeks has revived somewhat – mostly driven by inventory corrections – it is still considerably below pre-Covid levels,” Sanjay Samaddar, CEO of ArcelorMittal Poland said in a statement.

“This means we have to take some very difficult decisions, which will regrettably mean the closure of the blast furnace and steel shop in Krakow,” he added.

ArcelorMittal said high energy costs, rising carbon prices and a lack of emergency trade measures coupled with the European Commission’s recent decision to further increase the quota of tariff-free steel imports from outside the EU at a time of falling demand had also influenced the company’s decision.

“Taking all these factors into consideration, we have taken a decision to concentrate the production of hot metal in our two blast furnaces in Dabrowa Gornicza, to improve our cost competitiveness,” Samaddar said.

The company said the shutdown of the Krakow blast furnace and steel shop will begin this month and will last a few weeks. In 2018, the Krakow plant produced about one third of the company’s 5.2 million mt of crude steel in Poland.