Tiraspol, 1 February. /Novosti Pridnestrovya/. Today the cabinet has discussed the current situation with one of the biggest enterprise — Moldova Steel Works (MMZ). The reason for the discussion was a difficult situation in the industry caused by a global reduction in metal roll prices.
«If the average annual price for metal roll was $515 per tonne in 2014, in December 2015 it cost $285, and today its sale value is $270 per tonne. In 2014−2015 the price has fallen by over 52%. The basic component of production costs (70%) is metal scrap, and today the difference between the price of finished products and the price of scrap (raw material) is crucial. If earlier this difference was $265, in December 2015 it was $92. This critical point does not cover the plant's costs and results in its unprofitable performance," said the minister of economic development.
At the same time, the MMZ management notes that last year the plant opened up new markets in seven countries and produced almost 430,000 tonnes of steel.
«In 2015 the plant reached the highest rate of steel production since 2009. As compared with 2014, its production increased by 85,000 tonnes, or 24,78%," said MMZ finance director Aurelia Tkachenko.
However, there is a global decline in steel production, markets are oversaturated and, according to experts' forecasts, this trend will continue in 2016. But the biggest problem that Pridnestrovie's metallurgical colossus may face is interruptions in raw material supply. Ukraine (a chief supplier of metal scrap as of today) intends to introduce duties on scrap importation, which will raise its price several times.
«We are expecting a response from Ukraine. If the duties will rise threefold, there will be no point in importing it from Ukraine. If this happens, we should resume buying metal scrap in Moldova and Romania to prevent the plant from coming to a halt. These two markets may provide us with an average of 22,000 tonnes of scrap metal a month. To start production, it will take at least 2 — 2.5 months to accumulate it," said MMZ deputy director Seymur Akhundzada, adding that today the plant requires $15 — 20 million of investment to ensure normal production.
«We have reached a stalemate because the enterprise is budget-making for both the city and the country. We should find a way out of this situation," concluded Prime Minister Pavel Prokudin.
MMZ will receive the government's assistance, but its form and amount will be determined by the government, Supreme Council and the plant's management.
