The world’s second-largest steel producer ArcelorMittal has decided to close two of its blast furnaces in Europe, in Bremen (northwest Germany) and Asturias (northern Spain), to cope with rising energy prices and falling demand, reports AFP.

ArcelorMittal will close two units in Germany due to “excessive increases in energy prices”, which will “significantly” affect the competitiveness of steel production, the group explained in a press release on Friday.

“Add to that weak market demand, a negative economic outlook and still high CO2 costs in steelmaking,” says ArcelorMittal, which is concerned that in Germany “no plant can operate profitably.”

A slowdown in the auto industry, the steel industry’s biggest customer, also hurt profits.

One of the two blast furnaces at the Bremen flat steel plant will therefore be closed “from the end of September until further notice”.

“High gas and electricity costs are putting a lot of pressure on our competitiveness,” explained Rainer Blaszek, head of ArcelorMittal Germany, which is also responsible for the Bremen plant. He also condemned a new gas tax that will come into force on October 1 in Germany, designed to prevent the bankruptcy of gas importers and distributors.

In addition, the facility at the “Hamburg steel mill where ArcelorMittal produces rolled wire” will be closed. “The plant’s activity has already been reduced by about 80%,” said plant manager Uwe Braun. There, as in Bremen, the already existing partial unemployment measures will have to be continued.

In Spain, at the plant in Asturias, near Gijon, one of the furnaces will be temporarily closed at the end of September.

“The situation is worsened by the large volume of imported steel from non-European producers, which are not affected by the increase in the cost of CO2 emission quotas in the EU,” the group’s press release states.

In France, there are no plans to close the blast furnaces, but to slow down the activity in Dunkirk (north). Two blast furnaces there are already closed, one for maintenance, and the other since July as part of decarbonization of the site.

“The largest of the three blast furnaces continues to operate at Dunkirk, No. 4, which alone accounts for more than half of Dunkirk’s steel capacity,” a spokesman for ArcelorMittal France told AFP.