ArcelorMittal to shut blast furnace in German plant as gas prices soar

(Reuters) - ArcelorMittal said on Friday it would switch off one of two furnaces at its steelworks in the German city of Bremen until further notice from September-end, citing the soaring cost of gas, weak market demand and a negative economic outlook.

The world's second-largest steelmaker said it will also shut down the direct reduction plant at its Hamburg steel factory from the fourth quarter of this year, while keeping workers on shorter hours at both sites.

"The high costs for gas and electricity are putting a heavy strain on our competitiveness. On top of that, from October onwards, there will be the German government's planned gas levy, which will further burden us," Reiner Blaschek, chief executive of ArcelorMittal Germany, said in a statement.

"With a tenfold increase in gas and electricity prices, which we had to accept within a few months, we are no longer competitive in a market that is 25% supplied by imports. We see an urgent need for political action to get energy prices under control immediately," he added.

Russia has cut gas supplies to Europe after invading Ukraine in February, a move that has pushed up prices and threatened recession and energy shortages going into winter.

Along with the chemical, aluminium, paper and cement industries, the steel industry is one of the most energy-intensive sectors.

(Writing by Matthias Williams; Editing by Paul Carrel)