ArcelorMittal France Faces Crisis Amidst Rising Imports and Energy Costs
The future of ArcelorMittal's operations in France, and potentially across Europe, hangs in the balance due to a combination of high energy costs, unfair competition from third-country imports, and a significant drop in steel demand. Alain Le Grix de la Salle, head of ArcelorMittal France, made it clear that the European steel industry is currently in a deep crisis that could lead to mill closures unless urgent actions are taken by the European Union (EU).
During a session with the Economic Affairs Committee at the Assemblée nationale in Paris, Le Grix de la Salle confirmed that one-third of the steel industry in Europe could soon vanish if the EU does not intervene to shield it from unfair import competition, particularly from countries outside the EU.
Rising Imports and the Threat of Closure
Le Grix de la Salle was asked by a member of parliament whether any French steel sites would be shut down in 2025, to which he responded cautiously, stating that it was impossible to guarantee the survival of any specific plants. He emphasized that the steel industry across Europe, including France, is at significant risk.
The main contributing factors, according to ArcelorMittal, are unfair imports from countries outside the EU, and skyrocketing energy costs in Europe. While the company isn't opposed to imports per se, it insists that imports must be limited to avoid "devastating" effects on the European steel industry. One key issue raised by the steelmaker is the disparity in carbon costs. ArcelorMittal argues that the cost of CO₂ in Europe must be taken into account in trade agreements to ensure a level playing field for European producers.
Energy Crisis and Declining Demand
ArcelorMittal’s plight is worsened by the escalating energy costs in Europe, which are reported to be four to five times higher than in the United States. For steelmakers, energy is a significant operational cost, and these exorbitant prices make it even more difficult to compete globally.
Moreover, steel demand in Europe, particularly in France, has been in a consistent decline, averaging 4% per year, or about 20% over the last five years. This has led to a further loss of competitiveness among European steel producers, especially those like ArcelorMittal that serve many small and medium-sized enterprises. With demand shrinking, these SMEs are finding it increasingly difficult to remain competitive, which in turn affects the demand for steel.
Impact on Decarbonisation Investments
As part of its commitment to sustainability and reducing emissions, ArcelorMittal has been investing in decarbonisation technologies, particularly in its Dunkirk and Ghent plants. However, due to the downturn in the global steel industry, the company has had to suspend these investments at its Dunkirk facility and is also uncertain about the feasibility of proceeding with decarbonisation efforts at Ghent. The company is waiting for critical policy decisions, including the review of the Carbon Border Adjustment Mechanism and the upcoming Steel and Metals Action Plan, both of which could play a pivotal role in the company’s investment strategy.
Focus on Trade Safeguards and CBAM Reforms
ArcelorMittal has been vocal about the need for stronger trade protections to help safeguard the EU steel industry. The company is pushing for strengthened and permanent trade safeguard measures that would adapt import volumes to match the size of the current European market. In particular, it calls for a reform of the CBAM to make it more effective in ensuring that European steelmakers can compete on an equal footing with international competitors, especially concerning the cost of carbon.
The company has also expressed concern over the potential liberalisation of quotas in the final year of the safeguard measures, which could further harm the competitiveness of the EU steel sector.
Ongoing Uncertainty and Strategic Adaptation
With ArcelorMittal’s Reims and Denain plants in northern France already confirmed for permanent closure last year, the company is closely monitoring industry developments throughout 2025. The upcoming European Steel and Metals Action Plan and Clean Industrial Deal, expected to be published in the first quarter of 2025, are crucial for shaping the future of the steel industry in Europe.
While the company continues to adapt to the crisis, including implementing temporary cost and capacity reductions, it is clear that the industry needs swift action from the EU to secure its future. Le Grix de la Salle emphasized that Europe must recognize the serious risks facing the industry and take the necessary steps to protect steelmakers from further harm.
