BOSNIA (Metro Rail & Steel): ArcelorMittal, a major steel producer announced on November 17 the suspension of operations at its Bosnia steel plant and affiliated iron ore mines due to a substantial decline in demand across the European steel market. The company, which annually produces approximately 700,000 tonnes of liquid steel and employs around 2,200 workers, attributed the decreased demand to various factors affecting the European steel industry. These include reduced steel consumption since 2022 following the conflict in Ukraine, amplified energy prices, increased production costs, and prevalent inflationary pressures.
The steel plant located in the central town of Zenica initiated the shutdown process by halting the operation of its High Oven on November 11, gradually ceasing output from other operations thereafter, carefully considering available alternatives. In a statement to Reuters, ArcelorMittal Zenica expressed intentions to resume normal operations once demand rebounds to a sustainable level conducive for business continuity. The statement highlighted the exacerbation of demand conditions in the latter half of 2023, with ongoing economic uncertainties stemming from high inflation contributing to a projected continuation of this negative cycle.
Additionally, the company noted sales constraints imposed by the European Union’s protective regime and the challenge of competing against cheaper steel imports from Turkey, further impacting market conditions. Moreover, ArcelorMittal highlighted a decline in metal concentration in iron ore obtained from the Omarska mines supplying the Zenica plant, diminishing from 53 percent to 47 percent. This decrease necessitates larger ore quantities for producing the same metal quantity. As a consequence of the production halt, deliveries from the iron ore mines have also been suspended. The Omarska mines, supporting around 850 workers, rely entirely on supplying ore to the Zenica plant.
Previously, worker unions had announced a potential general strike to negotiate new terms but are considering postponement in light of the company’s production suspension. ArcelorMittal acknowledged a 32 percent wage increase since 2020 to counter the effects of inflation on its workforce.
