Romania’s steel mill Liberty Galati idles again on adverse market conditions

Liberty Steel (formerly known as Sidex), Romania’s integrated steel mill and Liberty’s only blast furnace operating in Europe, has again suspended the operation due to the difficult market conditions, Argus Media reported.

The blast furnace was reopened in mid-February after the Government extended guarantees for a EUR 150 million loan from Exim Banca Romaneasca (formerly Eximbank).

A company spokesperson told the news agency that the decision was made to introduce a temporary period of hot downtime and continue to operate the processing plants using slab stocks to ensure profitable and stable production in Galati.

The blast furnace at Liberty Galati in Romania has operated on and off for a year already, and, financially, the company is facing financial challenges. 

Closed down in October due to adverse weather (low water level of Danube), the furnace resumed operations on December 9 to stop operations during the Christmas period due to problems with the raw material supply. The furnace reopened in mid-February after state-owned bank Eximbank extended a EUR 150 million loan with state guarantees.

On the financial side, Liberty Galati is subject to tens of insolvency requests filed by small-sized suppliers that report that the payment discipline has deteriorated over the past year. 

The company claims that these are insignificant cases that are being settled. However, the appointment of a lawyer (Radu Ionescu) at the top of the company was interpreted as a precautionary measure ahead of more significant legal complications being expected. 

According to market sources quoted by Argus, Liberty used financing from Exim Banca Romaneasca to purchase raw materials for the blast furnace.

iulian@romania-insider.com

(Photo source: the company)