After making record profits in 2008, the main players in the Romanian steel market, i.e. the five plants held by the world's largest metals and mining company ArcelorMittal, by Russian mining and steel group Mechel and Russian pipemaker TMK, registered significant losses in the first half of 2009, reaching a total of RON 309.8 million (€73.7 million), the Romanian daily financial newspaper Ziarul Financiar reports.
Accordingly, in H1 2009, ArcelorMittal's plants in Roman and Iasi posted combined losses of RON 143.4 million (€34.1 million) - over six times higher than in the same period last year; Mechel's two main plants in the country located in Targoviste and Campia Turzii registered combined losses of RON 154.3 million (€36.7 million), while TMK's Slatina-based subsidiary TMK-Artrom posted losses of RON 12.2 million (€2.9 million), down from a net profit of almost RON 10 million (approx. €2.4 million) in H1 2008.
According to Romanian financial newspaper Ziarul Financiar, in the first half of 2009, the overall business of the five steel plants in question decreased by 52.4 percent year on year to RON 891.1 million (approx. €212 million).
The decline was caused by both significantly lower demand in the market and by the consistent fall of prices since last autumn. "The losses of the plants are linked to the automotive and constructions industries, which witnessed a similar decline as they export most of their output. It is no surprise they are experiencing heavy losses," Mr. Florin Ilie, head of the capital markets department within ING Bank commented.
Romanian steelmakers registered losses in the first half of the current year despite the anti-crisis measures implemented by their managements, which included sending the majority of workers on technical leave, the closure of some production facilities, or the temporary stoppage of the production and layoffs.
According to the data issued by the Romanian Association of Metal Distributors (ARDIMET), during the first half of 2009 Romania's output of crude steel amounted to around one million mt, compared to 2.84 million mt produced in the same period last year.