Czech Liberty Ostrava idles blast furnace 2

Liberty will put blast furnace 2 at its Ostrava plant in the Czech Republic on care and maintenance from the end of this month until the end of August, the company said today.

Blast furnace 3, with pig iron capacity of 1mn t/yr, will continue to operate. Blast furnace 2 has pig iron capacity of 1.1mn t/yr.

This means European steelmakers have idled around 23mn t/yr of pig iron capacity in response to the Covid-19 pandemic and its impact on steel demand, according to Argus calculations. Liberty said its customers are reporting a 30pc drop in demand.

The 400 employees affected at Ostrava will be redeployed where possible, while others will be rotated on temporary unemployment with 70pc of their salary.

Liberty still intends to open a hybrid furnace at Ostrava by 2022, subject to approval by the authorities, which would reduce its carbon footprint and cut costly coke consumption.

Mills in the Visegrad region — which comprises the Czech Republic, Hungary, Poland and Slovakia — have been selling base hot-rolled coil (HRC) into northern Europe at around €430-440/t delivered of late, in an effort to generate cash and keep lines running given the reduction in demand.

Argus' benchmark daily northwest European HRC index has fallen by more than €30/t over the past month since the virus started impacting European consumption. The index was at €451.25/t ex-works yesterday, compared with €482.25/t ex-works on 13 March.

By Colin Richardson