Liberty Galati has begun the restart of blast furnace no.5, which the firm says will be sustained by adapting to challenging market conditions, as well as “ongoing support and cooperation” from customers and suppliers.
The steelmaker idled the unit last month due to severe weather in the Black Sea and low water levels on the Danube River (see Kallanish passim). This came at the same time as Liberty Steel idled its Ostrava BF no.3 due to weak steel demand across Europe.
The steelmaking group says it is adjusting its product mix and production schedules, reducing its cost base and working with government to bridge energy price differentials experienced across Europe. This, coupled with stakeholder support, will help to ensure the Galati BF restart is sustained and the plant remains competitive through market cycles and as it undergoes its low-carbon transition, the firm adds.
“Our renewed focus on cost competitive semi-finished products is yielding results, helping us to increase downstream capacity utilisation, and improve cash flows which will start to improve trade payables over the next few months. We continue to work with government on solutions to bridge energy cost differentials, which now make up nearly 40% of the variable cost per tonne of steel produced, compared with just 8% in 2019,” says Galati plant operations managing director Prasanta Mishra.
Galati is the second-largest energy user in Romania, meaning energy price rises have a big impact on its variable costs. Carbon taxes now cost Galati around €150/tonne of steel produced.
The firm points out it is competing with companies from other EU countries whose governments are shielding them from energy policy costs that make up a substantial part of the total price. This makes it hard for Romania-made steel to compete in its domestic market, it adds.
In other news, Galati has appointed Radu Ionescu as its new general manager. Ionescu is a lawyer who has advised Liberty on a range of strategic decisions made in Romania in recent years.
Adam Smith Poland
