Mechel suspend work smelter in Romania and Ukraine
OAO Mechel ``, the leading Russian mining and metals companies, announces the temporary suspension of production at Donetsk steel plant, which is part of Mechel#39;s steel division ``, and the schedule of temporary suspension of the production process on the Romanian steel companies that are members of the East-European Steel Division Mechel ``, due to the unfavorable situation on the markets for raw materials and final steel products.
Due to unfavorable market conditions European steel markets against the background of rising prices for ferrous scrap and weak demand for finished goods temporarily suspended production capacity of metallurgical enterprises Mechel `` in Romania. The decision on temporary suspension was made in order to reduce production costs and to align it with the requirements of the market volume. Contributed to the decision, including the early execution of the enterprises annual production plans.
In particular, from 21 and 22 November 2012 temporarily suspended work EAF plants plant Mechel Targoviste `` and `Dactyl Steel plant Otelu Rosu` respectively. Also, after the production program from November 27, 2012 will be temporarily suspended rolling production at Mechel Targoviste ``, with 15 December 2012 is planned to suspend rolling and wire production at plants Dactyl Steel Buzau `` `` Laminorul Braila and Mechel ` Campia Turzii `.
To temporarily suspend production of the Donetsk steel plant introduced due to rising production costs and a decrease in its profitability associated with the steady increase in raw material costs of the plant - scrap - on the back of seasonal accumulation of stockpiles Ukrainian steelmakers.
During the period of temporary suspension of production at these steel plants will be carried out all the necessary actions to maintain efficiency of the equipment and its maintenance. Employees who are involved in these activities, the salary will be paid in full. In order to preserve jobs other workers not involved in routine work, will be paid for idle time or granted leave in accordance with the labor laws.
Temporary suspension of production will not affect the volume of sales. Deliveries for all contracts will be carried out from the warehouses in the normal mode.
The company is closely monitoring the market situation to normalize it to quickly restore production enterprises.
The expected economic effect from the temporary suspension of production will enable enterprises to more efficiently manage the available financial resources in terms of reduced demand for finished products, and the high price of scrap metal. This will minimize the financial risks and to protect the long-term interests of the company in the steel sector.
