Thursday, November 6, 2008

Mechel Romania Halts Steel Production for Five Days

By Irina Savu

Nov. 5 (Bloomberg) -- Mechel Targoviste SA, the Romanian steel mill owned by Russian steel and coal producer OAO Mechel, halted production for five days until Nov. 10 because of declining demand.

The halt, during which workers will be paid 75 percent of their wages, won't lead to job cuts, the Targoviste, Romania- based plant said today in a statement through the Bucharest Stock Exchange.

``Considering steel demand is declining because of the international financial crisis which affected Mechel Targoviste's clients, we've decided to temporarily halt production,'' the plant said in the statement.

Mills are slashing output globally as the economic slowdown curbs demand from builders and carmakers. ArcelorMittal, the world's largest steelmaker, said today it would reduce production of flat carbon steel by as much as 35 percent in the U.S. and 30 percent in Europe. Dacia SA, the Romanian carmaking unit of France's Renault SA, halted production for four days in October.

Mechel Targoviste, formerly known as Combinatul de Oteluri Speciale Targoviste, is one of the three steel mills Mechel bought in Romania in the past two years. Ductil Steel, which has a steel alloy and wire-products plant in Buzau and a billet- making facility in Otelu Rosu, and Mechel Campia Turzii are the other two mills owned by Mechel in Romania.

To contact the reporter on this story: Irina Savu in Bucharest at isavu@bloomberg.net.

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