Mechel temporarily halts production in Romania, Ukraine on weak demand

Russian steelmaker Mechel temporarily halted production at its factories in Romania and in Ukraine, because of weak demand for finished products and the rising ferrous scrap prices. “The decision was made in order to cut costs and synchronize production with market demands. The decision was partly helped by the fact that Romanian plants have already completed their production plans for the year,” according to Mechel. Employees doing the winter maintenance work will be paid their full salaries, while those not involved will be either paid for idle time or placed on leave, according to labor law, Mechel wrote in a recent statement. Starting on November 21 and 22, electric smelting facilities at Mechel Targoviste and Ductil Steel Otelu Rosu in Romania respectively were temporarily halted, while rolling production at Mechel Targoviste will also be temporarily suspended starting November 27 once production plans are met. Meanwhile, starting December 15, rolling and hardware production is planned to be temporarily halted at Ductil Steel Buzau, Laminorul Braila and Mechel Campia Turzii, all in Romania. In Ukraine, production at Donetsk Electrometallurgical Plant has also been temporarily suspended. Mechel hopes to resume production once market conditions 'normalize'. Earlier this year, Mechel announced plans to sell all its Romanian companies for some USD 150 million, according to Romanian media. This was part of a wider sales of its Eastern European Steel Division. The company said production will continue, but some layoffs are in sight. editor@romania-insider.com