Production at Czech mill Ostrava under continuous review

Ostrava steelworks in the Czech Republic, which last month suggested it will cut output by 20%, is continuously reviewing its production levels as raw material prices have decreased recently, the spokesman for Liberty Steel Group, which owns the mill, told S&P Global Platts Thursday.

Given lower raw material prices, as well as the minor reduction in the EU’s steel import quota, the production plan for the remainder of 2019 for the Czech plant remains unsettled.

Although the reduction in the steel import quota increase from 5% to 3% seems like a positive step, it is not enough in the stagnant market, according to the spokeswoman for Ostrava steelworks. “Any quota increase will outpace EU steel demand because the latter is expected to fall this year,” she said.

Speaking long term, Liberty has ambitions to grow steel production at Ostrava at least by half versus 2018, when the mill made 2.2 million mt.

The Czech mill has the potential for investment to capitalize on unused rolling capacity and to adjust the product mix towards greater profitability. In addition to the EUR 35 million ($39 million)/year sustenance capex Liberty Steel budgeted for the plant for the next 10 years, the group has also outlined the strategic investment to grow production at Ostrava to 3.4 million mt/year over time. Whether this development program will be rolled over or not depends on the results of the comprehensive review, according to the spokesman.

The company is undertaking a 100-day review of all aspects of the Ostrava mill operations and once that is complete it will provide more information on its future plans for the plant.

— Ekaterina Bouckley