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High electricity prices could harm Slovak steel industry

Steel production has been and will remain one of the pillars of the Slovak industry, without which it’s impossible to ensure a stable economy and employment, the Slovak Economy Ministry said in its action plan for a competitive and sustainable steel industry in Slovakia.

According to the statement, the steel industry employs more than 23,000 people and creates 10 percent of total Slovak industrial production.

Therefore, a new action plan for the steel sector in Europe presented by the European Commission (EC) last year, is in Slovakia’s interests, said Katarina Jastrzembska of the European Commission’s Directorate-General for Enterprise and Industry.

The steel industry is of strategic importance for the European economy, as it represents 360,000 jobs in more than 500 plants in 23 EU member countries.

“The European Union (EU), with an annual output of 177 million tons, is — after China — the world’s second largest steel producer,” stressed Jastrzembska.

According to her, the steel industry is also highly important for Slovakia, where the sector is dominated by U.S. Steel Kosice. “With annual production of 4.4 million tons of steel, Slovakia accounts for 2.4 percent of the EU’s production capacity,” informed Jastrzembska before adding that the sector also has a significant impact on regional employment and helps improve Slovakian foreign-trade figures.

The EU action plan for steel is based on six pillars — appropriate regulatory framework, galvanizing demand for steel, equal footing for steel producers across the EU, energy and climate policies to foster the sector’s competitiveness, support for innovations as well as the sector-specific qualification requirements.

“Production in the steel industry is growing, but outside the EU — in Russia, Ukraine and Turkey. Therefore, the EU intends to take measures in order to make the steel company competitive with that outside the EU area. This is of great importance for the Slovak steel industry as well,” said Slovak Economy Ministry State Secretary Pavol Pavlis.

The key aspect for the Slovak steel industry is how to push energy prices down, which is a vital factor in maintaining the competitiveness. Electricity prices for companies in Slovakia are the highest among the all EU member states.

Slovakian Prime Minister Robert Fico sees it as an obstacle for further development of the steelworks in the country.

“We’re witnesses already that expenditures on the so-called renewable sources in electricity production drastically increase energy charges — which cause particularly enormous problems for steelworks. We tried to find a solution in order to minimize the impacts on the firms,” added Fico.

The Slovak government supports two main steel producers, U.S. Steel Kosice and Podbrezova Steelworks, whose general director Vladimir Sotak praised the government’s constructive approach to the issue.

“We have an interest in continuing to run our business and employing thousands of people. The EU can’t introduce more stringent rules for itself, not when similar rules haven’t been embraced by the Americas and Asia,” said Sotak.

Source – Xinhua

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