The largest metallurgical enterprise in Ukraine, “ArcelorMittal Kryvyi Rih,” is facing a real threat of complete shutdown due to record-high electricity tariffs. The company’s CFO, Pavlo Zadorozhny, stated that the plant has been operating at a loss for the fourth consecutive year, and the resources of the parent company are limited.
This is reported by Finway
Reasons for the Increase in Tariffs and Their Consequences
In May of this year, the price of electricity for “ArcelorMittal Kryvyi Rih” exceeded €94 per MWh, the highest figure among all European countries. In comparison, in France, where nuclear generation dominates, this figure was approximately €20. According to experts, the main factors contributing to this situation are the monopolistic position of “Energoatom” and the restrictions on the import of cheaper electricity imposed by “Ukrenergo.” As a result, there is virtually no competitive electricity market in Ukraine, which places a critical burden on industrial consumers.
Possible Consequences of the Plant’s Shutdown
If “ArcelorMittal Kryvyi Rih” shuts down, 18,000 jobs will be at risk, along with an annual foreign currency revenue of over $1 billion. The enterprise cannot pass on the rising costs to consumers, as product prices are determined by the global market.
“We cannot pass additional costs onto consumers, as the market dictates its prices. If nothing changes, we will not be able to survive,” Zadorozhny warned.
The issue of electricity costs has already become critical for the entire metallurgical industry in Ukraine and requires immediate resolution at the level of state policy.