Russian mining and steel group Mechel has announced a temporary halting of production facilities at Ukraine-based subsidiary Donetsk Electrometallurgical Plant (DEMZ), which is part of Mechel’s steel division, and has also announced the schedule for temporary suspension of production at the group’s Romanian steelmaking facilities that are part of Mechel’s Eastern European Steel Division, in both cases due to unfavorable conditions in the markets for raw materials and finished steel products.
Due to unfavorable prices in European steel markets linked to rising ferrous scrap prices and weak demand for finished products, production at Mechel’s Romanian steelmaking facilities is being temporarily halted. The decision was made in order to cut costs and synchronize production with market demands.
Production at Donetsk Electrometallurgical Plant has been temporarily suspended due to rising production costs and reduced profitability linked to a steady increase in prices for the plant’s primary raw material - ferrous scrap - as Ukraine’s steelmakers are currently carrying out seasonal stock replenishments.
The temporary suspension of production facilities will not affect sales volumes. All contractual supplies will be made from warehouses as normal.
Mechel said that it is closely monitoring market conditions, so that production may promptly resume once conditions normalize.