ArcelorMittal has announced that it will 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.''

Reiner Blaschek, chief executive of ArcelorMittal Germany

"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.

''We see an urgent need for political action to get energy prices under control immediately."

Reiner Blaschek, chief executive of ArcelorMittal Germany

"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.

ArcelorMittal said higher gas prices caused by the Russia-Ukraine conflict are impacting the work at the two facilities.

This is making the two plants ‘unprofitable’, according to a report by The Wall Street Journal.

ArcelorMittal has already reduced its gas consumption in Germany and produced around 70Mt of steel in total last year.