The Russian steelmaker and iron ore producer Evraz Group (Evraz) said that it could close the melting shop at its Czech-based subsidiary Evraz Vitkovice Steel if it fails by June 15 to reach a price agreement on pig iron supplies with ArcelorMittal Ostrava, Czech-based subsidiary of the world's largest integrated metals and mining company ArcelorMittal.
Currently, Evraz is working with the management of Vitkovice Steel to evaluate the possibility of a temporary or permanent shutdown of the steel shop at Vitkovice, in the event of no price agreement being reached with its raw material supplier. Meanwhile, according to Pavel Tatyanin, head of Evraz's international operations, Vitkovice's rolling mills would continue operating using imported steel if the pig iron dispute with ArcelorMittal is not resolved.
As SteelOrbis previously reported, the long-term agreement which guarantees the supply of liquid pig iron from ArcelorMittal Ostrava to the steelmaking facilities of Evraz Vitkovice Steel until 2015 was signed between the sides in May 2009. However, according to Mr. Tatyanin, the agreement in the current situation is disadvantageous, as the plant has been losing money since 2009, due, he said, to the high prices for pig iron demanded by the Czech unit of ArcelorMittal.
Meanwhile, officials at ArcelorMittal's Czech unit said they were surprised Evraz was blaming their company for financial problems during a difficult year for all steelmakers.
Evraz Vitkovice Steel is a leading European manufacturer of rolled steel products located in Ostrava, Czech Republic. It is one of Europe's top producers of heavy plates and is the only plate producer in the Czech Republic. The Evraz Vitkovice steel plant has a production capacity of 965,000 mt per year, while its plate mill has an annual capacity of 755,000 mt.