Investor's window  |  November 15, 2012 16:31:29

Steel mills? Increasingly dismal prospects

Our eastern neighbors excited this week about the fact that U.S. steel giant U.S. Steel evaluates offers for sale Kosice plant. Attracting strong interest in this report is entirely logical. U.S. Steel Košice is employs around 11,000 people, making it the largest private employer in the Slovak Republic. So far none of the sites did not reveal the names of potential buyers remain confidential and the reasons why he wants U.S. Steel to sell the plant and in fact so completely withdraw from Europe.

Difficult situation but experienced steelworkers across Europe, including the Czech ones. In addition to domestic steelmakers have faced dwindling demand and strong, we can say calmly liquidation, rising electricity prices.  

Looking at the evolution of energy prices on the stock exchange is not even that hard to believe, after all, just for this year this commodity declined by 9% from 52 EUR / MWh to 47.4 EUR / MWh. The increase in electricity prices, which felt both consumers and businesses in the Czech Republic does not stand alone commodity prices rise, but the charge on the promotion of energy produced from renewable sources.

Photovoltaic boom comes nicely us so dearly. And now it turns out that his support is not only a direct negative impact in the form of higher payments for energy, but also indirect effects through a sharp reduction in the competitiveness of Czech industry (such high fees does not apply anywhere else in Europe). It is clear that the steel industry as a very energy-consuming sector that will suffer the hardest, and I expect that in the next few months we hear about Ostrava and local steelworkers to consider cutting production and layoffs.

The departure of ArcelorMittal Ostrava while lively discussion in the previous year. Finally, the management decided to dismiss "only" 10% of employees and close the smelter in Poland. If there were further reductions, it would have a dramatic impact not only on employees, but also to companies within the supply chain. A shining example is the coal miner NWR, which 33% of the coking coal supplies just ArcelorMittal Ostrava.

George Šimara,
Cyrrus analyst

Marek Hatlapatka (1978)

He graduated from the Economics Faculty of the Technical University of Ostrava, completed a 3-month internship in London and Intensive fundamental analysis under the leadership of former chief analyst of Erste BankGalea Kirking. In a society CYRRUS, as is employed since 2006, when he took the place of the analyst equity markets with a focus on foreign markets, pharmaceutical and banking sectors. Subsequently he specialized in banking, electricity and coal mining in these sectors is now one of the most sought after professionals in the Czech Republic. In 2008 he became head of the analytical department of the company CYRRUS, as in this position works even today. Long been one of the most cited Czech economists, in 2010 became the fourth most cited economist in the Czech media.

CYRRUS Company, Inc., is a licensed securities dealer. The company was founded in 1995 and is currently the largest non Prague brokerage companies. It is a member of the Stock Exchange Prague Stock Exchange in Warsaw. CYRRUS Company, Inc., provides comprehensive services in the capital markets, private and corporate clients, focusing on the Exchange trading system SPADPrague Stock Exchange and trading on foreign markets in Poland, Hungary, Turkey, Germany and the USA. The company is one of the most important Czech businessmen with investment certificates.

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