ArcelorMittal Kryvyi Rih complains about electricity price increases

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Photo: c/o ArcelorMittal

The cost of electricity for ArcelorMittal Kryvyi Rih jumped last month rose by about 20% compared to June. This might lead to an increase in the cost of production, the company’s press service said.

Quote"The rise in price per kilowatt hour will lead to a further increase in costs. We expect a wave of cumulative effect through increased energy costs — suppliers will increase the cost of their services and goods, which will also negatively affect the cost of our products, " head of the company’s raw materials procurement department Oleh Aiko said.

The company said the price hikes concern active and reactive electricity, services for its distribution, transmission and dispatch control.

ArcelorMittal Kryvyi Rih also said that market changes should not be carried out to the detriment of Ukrainian producers. Electricity fees are a large part of the overall cost structure, especially for metallurgy.

The company also said that the state needs to take measures to bring tariffs to a level comparable to global trends. Indeed, in Europe, metallurgists pay 25% less for electricity than in Ukraine, worsening the country’s competitiveness in world markets.

Context:

  • From July 1, in Ukraine, in accordance with the provisions of the law on the electricity market, new market rules began to operate.
  • The law facilitated the transition to a competitive mechanism for pricing electricity and introduction of a new market model, which includes a number of segments: the bilateral contract market, the day-ahead market, the intraday market, the balancing market, and the auxiliary services market.
  • Energy market reform is one of the requirements of the European Union.

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