JSC Liepajas Metalurgs, which specializes in longs production and has a long history extending back to 1882, is the only metallurgical company in the Baltic region. During the SteelOrbis Spring 08 Conference and 58th IREPAS Meeting held in Istanbul on April 6-8, SteelOrbis had a chance to talk with Mr. Ilja Segals of Liepajas Metalurgs, regarding his company's work and its future plans.
SteelOrbis: Could you tell us about Liepajas Metalurgs's production range and capacity?
Mr. Segals: Liepajas specializes in production of long products. Although we mostly produce rebar, we also manufacture wire rod and other long steel products. We produce 670,000 metric tons of steel per year.
SteelOrbis: Could you specify the priority markets for your company's product sales? What are the export and domestic market shares in Liepajas' overall production?
Mr. Segals: We mostly sell our products to the European Union and to domestic Baltic markets. In addition, Liepajas is also shipping its products to other world regions, for example to North Africa. Regarding the domestic sales and exports ratio it is a bit difficult to tell, as it is depends on market conditions.
SteelOrbis: Do you implement or plan to implement any new investment projects?
Mr. Segals: Currently we are implementing an investment project directed toward the complete switch from the open heart furnace (OHF) to the electric arc furnace (EAF) method in steel production. We plan to complete the project within three years.
SteelOrbis: As you know scrap prices are soaring worldwide. What is the current situation with scrap supplies to Liepajas, taking into account that Liepajas will switch to EAF which uses scrap as the main raw material for steel production?
Mr. Segals: Currently we do not have problems with scrap supplies. We source scrap mostly from the domestic market (Baltic region), which has sufficient scrap reserves to satisfy our needs. Therefore, we are not thinking of changing to another raw material base.
SteelOrbis: Could you tell us briefly about the current market situation. What is your short-term forecast for the market's development?
Mr. Segals: Up to the second half of 2007, the domestic Baltic market was on a very strong trend. Thanks to the large amount of construction projects implemented in the region the demand for rebar was very strong. The domestic conditions were so good that we were selling our products mostly domestically, allocating only limited amounts for exports. However, as you might know, starting from the second half of 2007, the domestic Baltic market went into recession, being impacted by the housing mortgage crisis which spread throughout most of the Eastern European countries. The mortgage crisis brought a sharp fall in construction and therefore in demand for rebar. However, we expect the market to revive sometime in the second half of 2008.