Soaring markets boost Stelco but not enough
Hamilton,
Canada-based Stelco's Chief Executive Officer (CEO), Courtney Pratt, has stated that although soaring steel prices are helping the bankrupt company, they won't overcome its structural cost problems. In January, Stelco obtained court protection from its creditors so it could restructure operations and renegotiate an enormous debt that exceeds $2 billion.
According to the company's CEO, the basic problems that forced the company to seek bankruptcy protection are still in existence and cannot be fixed simply by high steel prices. He further noted that the company's current liabilities exceed its assets and it does not have the cash to invest in equipment, maintenance, and new projects that would make the company more competitive.
In addition, increasing costs of energy, raw materials, pensions and other benefits are expected to rise even further this year and in the future.
The Steelworks which represents
production employees and retirees had originally rejected participating in restructuring talks because of worries it would result in major concessions. However, the union recently agreed to join the negotiations.
As SteelOrbis previously reported, Stelco announced the closing of its rod mill in Hamilton which resulted in the unemployment of 160 workers