The world's largest steelmaker ArcelorMittal said on Thursday it was closing the blast furnace at a plant in Poland due to a demand slump triggered by the coronavirus pandemic and cheap imports from outside the EU.

"The Covid-19 pandemic has huge consequences for the European steel industry... demand for steel is still significantly lower than before the pandemic," said Sanjay Samaddar, CEO of ArcelorMittal Poland.

"We have to make difficult decisions -- in this case, unfortunately, the decision to permanently close the blast furnace and steel plant in Krakow," he said in a statement posted on the company's website.

Polish media reported that 650 employees "could be directly affected" without saying whether they will be let go.

The company also noted that there was little hope for a recovery in the steel market in the near term, meaning it needed to "take sustained measures to adapt to the lower demand."

ArcelorMittal is the largest steelmaker in Poland, employing 11,000 workers at six plants across the southern regions of the EU country of 38 million people, which is also home to plants run by several global carmakers.

Prior to the onset of the coronavirus pandemic, ArcelorMittal held around 70 percent of the Polish steel market and was a leading European producer and exporter of coke.

ArcelorMittal on Thursday also singled out several other factors hampering steel production in Europe aside from the pandemic.

It pointed to a recent EU decision to increase duty-free quotas on steel imports from outside the EU and to high energy costs triggered in part by carbon emissions taxes, among other factors.

Losses deepened at the global steelmaker during the second quarter as demand for steel slumped due to coronavirus lockdowns, according to data published in July.

Prior to the pandemic, analysts warned that cheap steel from Asia and high carbon emissions costs were already taking a toll on European steel mills.

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ARCELORMITTAL

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