Liberty’s Ostrava steelworks cuts output 20 percent without job loss

Czech Republic-based ArcelorMittal Ostrava, which recently became a member of the Liberty Steel Group, has announced that it will temporarily reduce steel production by 20 percent, amid the steel market developments in recent months - the rise in CO2 emission prices, the rise in raw material and energy prices, as well as unfair imports of steel from non-EU countries.

The company said that it will reduce production by slowing down its pace, not by shutting down production facilities. Reducing production will not affect employment and employees will be taking holidays or be shifted to some other activities as required.

“Unfortunately, we must take this step to respond to the development of the last several months, that has not been favorable for steelmakers in Europe. The price of CO2 allowances has increased 264 percent over the last one and half years, iron ore prices have risen 65 percent since the beginning of the year, the imports of cheap steel have grown by 13 percent and reached a quarter of the total EU steel consumption. Moreover, the European Commission has now increased the quotas for steel imports by another five percent despite the already complex market situation and the weakening economies of the EU,” stated Ashok
Patil, CEO of the Ostrava steelworks.

According to ArcelorMittal Ostrava, imports of cheap steel to Europe have grown 13 percent year on year to 39.2 million mt, which is an annual production of 15 large steel companies of the size of the Czech integrated steelmakers. 65 percent of total EU imports come from only five countries, namely Turkey (quadrupling exports into the EU from 1.5 million mt in 2009 to 6.2 million mt last year), Russia, South Korea, India and China.