ArcelorMittal Kryvyi Rih, Ukraine’s steel giant, announced it would shut down its subsidiary, Foundry and Mechanical Plant LLC (LMZ), a machine-building and repair-mechanical complex, in three months. The number of job cuts will exceed 2,400, but LMZ employees will receive job offers at ArcelorMittal Kryvyi Rih with the possibility of retraining.
The decision is driven by the “extraordinarily high cost of electricity” in wartime Ukraine. Continuous Russian attacks on energy infrastructure led to a severe deficit, forcing the plant to import power at prices that tripled since the invasion began.
“The loss of the European market has undermined efforts to secure enough internal orders to sustain LMZ operations,” the company stated.
By February 2026, electricity prices for enterprises reached $230 per MWh, peaking at $370 per MWh during high-demand hours. The company’s press release states that the surge led to a dramatic production collapse in January 2026:
- Pig iron production down 30%
- Steel production down 40%
- Rolled products down 60%
The enterprise’s work became more difficult after the European Commission’s Carbon Border Adjustment Mechanism (CBAM), which took effect on Jan. 1. ArcelorMittal noted that the lack of a transitional period or exemptions for Ukrainian producers has effectively severed access to the European market.
According to the website, the LMZ plant consists of 7 production units: mold production, steel foundry, iron casting unit, metal structures workshop, repair and mechanical units, and repair and assembly parts of production.