Liberty Ostrava to idle blast furnace on Covid-19

Liberty Ostrava will at the end of April idle blast furnace no.2 until the end of August after an assessment of market conditions resulting from the Covid-19 pandemic, the Czech steelmaker says. Blast furnace no.3 will remain in operation.

The move will allow Ostrava to adapt to reduced European steel demand by decreasing hot metal production by -20% and more efficiently managing inventories, the firm says. In recent years, the May-July period has been the construction sector’s seasonal peak, which sees the highest volume of steel dispatches, but now Ostrava says its customers are reporting -30% lower demand.

“We plan to return the furnace to full operational capacity by the end of August, which could be brought forward by one month if market conditions allow,” Liberty Ostrava chief executive Pascal Genest says in a note seen by Kallanish. “The Covid-19 pandemic has caused disruption across the European steel industry and our customers are no exception. We will continue to be in a position to meet their current and future requirements.”

BF2 will be placed under care and maintenance, enabling it to be re-opened swiftly once the economic environment improves, Ostrava explains. The 400 employees affected will be redeployed where there are vacancies, while others will be rotated on temporary unemployment with 70% salary.

Meanwhile, Ostrava’s strategic investment announced in February continues. The firm expects to submit an Environmental Impact Assessment (EIA) application for its new hybrid furnace to the Czech Ministry of Environment this month. It believes that, with fast track approval by authorities, the furnaces will be operational in 2022.

“In spite of the pandemic, we remain ambitious for the future of the Ostrava steelworks and look forward to serving the regional Central European steel market,” Genest concludes.