ArcelorMittal Kryvyi Rih, the Ukrainian subsidiary of Luxembourg-headquartered ArcelorMittal, has announced that it will suspend operations at its blooming shop in the second quarter of 2026, citing economic and market pressures linked to the ongoing war.
CBAM eliminates access to EU market
According to the company, the decisive factor behind the suspension is the European Union’s decision to apply the Carbon Border Adjustment Mechanism (CBAM) from January 1, 2026, without exemptions or transitional arrangements for Ukrainian steel producers.
As a result, ArcelorMittal Kryvyi Rih expects to lose access to the EU market for a substantial share of its steel output. This loss is expected to sharply reduce order volumes and undermine the economic viability of certain production units, including the blooming shop.
Since the outbreak of the full-scale war, the company has redirected a significant portion of its sales toward the EU, rebuilding its presence in the market under extremely difficult conditions. However, the introduction of CBAM without accounting for Ukraine’s wartime circumstances has effectively nullified these efforts, the company said.
Without a stable EU outlet, ArcelorMittal Kryvyi Rih stated that current and foreseeable demand levels are no longer sufficient to maintain continuous operation of the blooming shop.
Electricity costs add further pressure
High electricity prices in Ukraine were cited as an additional and critical constraint. Ongoing attacks on energy infrastructure, power supply shortages and increased reliance on imported electricity have significantly driven up production costs.
According to the company, electricity prices for industrial consumers have more than doubled since the start of the war, rising from around $135/MWh in 2024 to approximately $210/MWh in January 2026. This escalation has further eroded margins and rendered the operation of the blooming shop economically unviable under current conditions.
