Situation in 1999
Year 1999 is the year of culminating sales crisis problems coherent how with world-wide situation on the steel markets, so with internal problems. At most was the sphere of flat products influenced. As most serious negative impact in relation to domestic market was the dynamics fall in area of machine building. Production drop in machine building, building industries plus lower activities in investing against the year 1998 have had dominant influence on lower steel consumption in the CR. Long-term problem for consumption steels is being chronic stagnation - better said crisis in the development of building industries.
The apparent steel consumption cut down in Y1999 to 4.1 millions t against 4.52 millions t in Y1998. The steel output dropped by 14.6 %; production of rolled material fell by 8.5 % and the recession at the tubes has been lasting already for some years.
Exports dropped by 7.3 % and supplies into inland by 26.8 % at further growth of imports. At the first time the import share counts over most 50 % on inland consumption at many items.
Further very meaningful circle of problems was the consequence of the lack of operation capital at two big producers - Nova hut, a.s. and VITKOVICE, a.s. At the Nova hut, a.s. it's the consequence of ill-bred supply of the technological equipment for so called Minimill, whose supplier was firm Tippins. At VITKOVICE, a.s. that is due to accumulated consequences several years lasting negative development situation in engineering production. Both have to be now solving on government level.
Reopened consequently can be the question, whether it will be possible to manage restructuring financing of the Czech steel industry in volume 82 billions CZK. Respond is from the sight of both named key companies that, making the steel production in VITKOVICE independent and the help in bank credit form to operation financing would have had together with rationalisation conditions financing of the restructuring to enable. Nova hut, a.s. faces even modernising of the steel making section. The greatest financial amount has been invested into so called Minimill. Clearing the technical insufficiencies in thin slab production, bank credit help for bypass of temporary lack of operation capital and impletion of credit arrangement with IFC are sufficient solving here again.
For second phase of elaborating the Restructuring study under EU arrangement financed from assets of PHARE were already sent the terms of reference to 11 society chosen in 1st round of the tender.
Prospects for steel in CR in this year are prosperous. Machine building returns back to its positive development and the building industry after a few years shows the positive trend as well. This is demonstrated by results for the Q1 of this year evidently.
