The timing of a restart at Czech steel producer Liberty Steel Ostrava’s plant is still unclear with talks over unpaid debt still ongoing and the plant’s workers set to remain on paid leave for at least another week.
“Workers will remain on paid leave until Jan. 23 at the earliest,” Petr Slanina, the representative of the biggest union at the plant, Kovo, told S&P Commodity Insights in a Jan 15. phone interview following an update on the current situation with local management of the plant. Slanina said another update is expected in a week’s time.
The Czech Republic’s biggest steel producer has been effectively closed down since Dec. 22, when its sole power supplier, Tameh Energy Czech, cut off supplies due to a backlog of unpaid bills by the steelmaker.
Tameh Energy Czech spokesman Patrik Schrober said in a statement Jan. 15 that Liberty Steel Ostrava had not so far paid “any significant part” of the outstanding debt.
“For this reason Tameh Energy Czech cannot generate any of the power needed for the restart of production and most of the steelmakers’ workforce will remain on forced leave,” he added.
Tameh says it is owed Koruna 500 million ($22.16 million) by Liberty Steel Ostrava in long-term outstanding energy bills which should already have been paid, with total debts amounting to around Koruna. 2.0 billion.
Kovo’s Slanina said that he had been assured by the steelmaker’s management that “talks are continuing at the highest levels between the companies to resolve the dispute over energy bills so that production can resume.”
Even if Liberty Steel Ostrava’s workforce returns next week it would still take several more weeks for normal production to resume, Slanina added.
Liberty spokesperson Katerina Zajickova said in a Jan. 15 reply to questions that talks with Tameh’s strategic shareholders “are going more slowly than we would like, but we remain confident we will find a solution in the coming weeks.”
“I cannot say when we will restart blast furnace 3 and the steelworks,” she added.
Zajickova also noted there were “growing signs of recovery in the European steel market since the beginning of the year,” which should be reflected in higher prices as the year progresses for steel products. This would help Liberty Steel’s optimization plan to improve profitability when production restarts by focusing on production of high added value products, such as seamless and spiral pipes, road barriers, mine supports and threaded bars, she added.
Liberty Steel Ostrava, which is part of the international GFG Alliance headed by Sanjeev Gupta, has production capacity of around 2 million mt/year. It produces rolled products, tubes, and flat products with main customers in the construction, engineering, and oil and gas sectors.
Platts, part of S&P Global Commodity Insights, assessed Northern European hot-rolled coil at Eur730/mt EXW Ruhr Jan. 13, up Eur40/mt on the month.
Author Chris Johnstone, support@platts.com
