The second largest Russian steel plant Evraz stopped producing steel at its subsidiary enterprise Evraz Vitkovice Steel, as due to the crisis the demand for the company's production significantly decreased. The analysts warn that the Russian steel industry may suffer from recession soon.
As Reuters informs, the work of Evraz Vitkovice Steel (the only steel sheets producer in Czech republic and the largest one in Europe) was frozen because of insufficient demand, with the purpose to cut the company's costs.
Czech Evraz also specializes on producing rolled steel, which is widely used for constructing automobiles, ships and bridges. While the process of steel production is stopped the rolling plant will be functioning.
As the the representative of Vitkovice Steel Jaromir Krisica informed, the length of break in steel production depends on lots of factors, which are currently under the company management's consideration.
As Mr. Krisica informed, some employees of Vitkovice Steel were sent home, they will get 80% of their salaries. Meanwhile other workers will be transferred to other plant departments or will perform certain maintenance work.
According to the report of the World Steel Association (WSA), these days the European steel market experiences a huge downturn. The forecasts of the association show that in 2012 the demand for steel will fall by 5,6%, and in 2013 it will increase by only 2,4%, reaching the level of 148 mln tones. The analysts of WSA say that the level of steel consumption in Europe hasn't grown within the recent time, at the same time the growth of economy in different European countries goes uneven.
As the experts affirm, in Europe especially in its Southern part, the demand for steel is rather low. At the same time the level of demand is more dependant on the governments' policies rather than on the companies themselves. This is a serious obstacle for making whatever forecasts especially regarding the situation on the world steel market.
The real alarm at the international steel sector began in October, when the largest steel-casting plant ArcelorMittal stoped the work of its two furances in Floranzh, and the French government got 2 months for finding a customer for ArcelorMittal.
According to the data from Interfax agency, the downturn at steel markets may negatively influence the Russian steel industry. Moreover, such negative Russian factors as a bad logistics, inflation and an eccessive level of supply can make the situation on the European steel market even worse.
It should be noted that the Vitkovice steel mill is the main supplier of raw meterials for the Czech division of ArcelorMittal. Last year Vitkovice company sold 824 thousand tones of rolled products and 760 thousand tones of steel slabs.
