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Steel group Arcelormittal stops two plants

Because of the sharp rise in energy prices, industrial companies with high electricity consumption are reducing their production.

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Steel group Arcelormittal stops two plants

Because of the sharp rise in energy prices, industrial companies with high electricity consumption are reducing their production. Europe's largest steel group, Arcelormittal, will stop two plants in the north from October. The direct reduction plant in the Hamburg long steel works is decommissioned. One of the two blast furnaces at the flat steel site in Bremen will be shut down until further notice.

Arcelormittal produces around 700,000 tons of wire rod per year in its Hamburg plant. It uses more electricity and gas than any other company in the Hanseatic city. "On average, we use one terawatt hour of electricity per year - as much as the city of Kiel - and two terawatt hours of gas," said the head of the steelworks, Uwe Braun, of the "Zeit". Since it is currently not possible to work competitively under such conditions, the group has already significantly reduced production.

The aluminum manufacturer Trimet already reduced production at its smelting sites in Essen, Voerde (NRW) and Hamburg in October 2021, as a company spokesman said. "The current electricity price level ensures that the costs for the production of aluminum have risen to such an extent that no cost-covering, let alone profitable production can be achieved," it said in a statement.

The copper manufacturer Aurubis explained: "At the moment we are sufficiently supplied with natural gas for our production processes." In the Hamburg plant, natural gas is urgently needed in some production processes and can only be replaced with difficulty in the short term. Switching to alternative energy sources would result in significant costs and delays. A company spokesman reminded that copper is an important starter product for the cable industry. The metals from Aurubis are the key to the energy transition, copper is needed for wind turbines, electromobility and solar energy.

According to the Statistics Office North, Hamburg’s metal-producing companies consumed 12,573 terajoules (around 3.5 terawatt hours) of electricity in 2020. That was almost 30 percent of the city's total consumption of 42,169 terajoules (11.7 terawatt hours).

The forklift manufacturer Jungheinrich in Hamburg-Wandsbek also wants to save energy. One of two large office buildings will not be heated until the end of March, a company spokesman said. According to a company agreement, around 1,000 employees in Hamburg could work from home. According to previous experience, about half of them use the offer. That is why one of the buildings is not needed. With the savings measure, Jungheinrich wants to assume its responsibility in the energy crisis and keep its promise of production that is as sustainable as possible. However, the energy requirement is only one of the cost factors.

"We are aware that the high energy prices are causing great difficulties for many companies," said the Hamburg economics authority. Since the summer there have been intensive talks between Senator Michael Westhagemann (independent), the industry coordinator Andreas Rieckhof and the companies, "especially against the background of a possible gas shortage". The Senate as a whole is committed to an energy price cap for electricity, gas and heat at federal level. "The deindustrialization of Germany must be prevented," emphasized a spokesman for the authorities.

In view of the sharp rise in energy prices, the city of Hamburg is now informing citizens how to avoid blocking gas and electricity due to unpaid bills. "We want to inform endangered households about offers of help so that nobody gets into an emergency," said Environment and Energy Senator Jens Kerstan (Greens) on Thursday. They are also in talks with the energy suppliers so that there are no blockages.

"The planned hardship fund is also intended to help protect households from energy cuts," said Kerstan. The Senate wants to make 15 million euros available for this. "It is important for those affected to address payment problems at an early stage so that a solution can be found."

The city's website and information sheets therefore refer to offers of help in simple language. The texts, written in German, Turkish, English, French, Russian and Ukrainian, were coordinated with suppliers, the state working group for debt advice, welfare organizations, the consumer advice center, the job center and with authorities and network operators as part of the round table on avoiding energy cuts. "In the current situation, it is more important than ever that we all stand together to overcome this energy crisis," said Kerstan.

Hamburg's DGB boss Tanja Chawla meanwhile referred to the precarious situation of many older people and explicitly called for a second energy price flat rate of 500 euros for pensioners. Many seniors left the heating off this winter "for fear that otherwise they would no longer be able to pay the high costs," she explained. Pensioners have no employer from whom they could get an additional payment for energy costs. "This is where the federal government has to step in."

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