US Steel announces lay-offs in Košice

US Steel announces lay-offs in Košice

The largest employer in eastern Slovakia, U.S. Steel Košice, will reduce the number of employees working in the steel mill and its subsidiaries by 2,500 by the end of 2021 announced the company's management last week. The main reasons for the step are decreased orders and a lower production caused by the situation on the market. Only in May 2019, U.S. Steel Košice denied that it was considering layoffs. The company and its subsidiaries currently employs around 12,000 people. As the first step, the US Steel Košice will reduce its working week by one day.

One of the reasons for the changed situation on the market is the price of emission allowances, which has increased from €4 to €26 throughout the last year due to the European Commission's efforts to protect the environment.

Mário Jičinský, an analyst from the Capital Markets company, pointed to the fact that the price of steel had dropped from €600 per tonne to €528 and also to the high social standards in the EU and the high prices of energy.

Another reason is the trade war between China and the USA. In 2018, the American president Donald Trump imposed a 25% duty for steel imported to the US from abroad. This supported domestic producers, however, forced producers from other countries to sell outside the USA for lower prices. Moreover, on Monday morning the SME daily wrote that China had introduced import duties on steel from the EU, which should come into force as of Tuesday July 23.

The Economy Ministry and the Government have been communicating with U.S. Steel Košice as an important employer in the long run to seek solutions to the situation. "One of them could be higher electricity price compensation, depending on the state budget," said Maroš Stano Economy Ministry spokesperson.

At the same time, however, he pointed out that the current development also suggests an overall cooling of the economy and the related drop in orders. "In the future, this will probably require the introduction of support and incentive tools both at the level of individual countries but also at a European level," noted Stano.

The trade unions from US Steel Košice plan to initiate a petition for improving the conditions in the steel industry, which should be addressed to the Prime Minister Peter Pellegrini.


Mojmír Procházka Foto: TASR

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