Montenegrin Powerhouse EPCG Željezara Nikšić to Restart by 2024

Blast furnace, steel prices

Regional media reports state that Montenegrin specialty steels producer EPCG Željezara Nikšić aims to restart production by the end of 2023, possibly impacting steel prices. The facility went offstream in 2021, dramatically reducing steel output in the small Balkan country. Analysts remain eager to see how the restart might affect steel prices in the region.

“There has been no steel production for almost three years, and I hope that maybe in three months we can prepare everything for the start of production,” state broadcaster RTCG quoted the president of the SDP trade union at EPCG Željezara Nikšić, Ivan Vujović, as saying on September 6. “But we need to wait first to see the budget. Because without that, we cannot start operations.”

Reports also indicate there are plans to hire an additional 1,500 workers at the plant over the next 1.5 years. This is in addition to the 290 employees on site.

steel prices and new steel output

A September 12 article from news website Café de Montenegro noted that the Željezara Nikšić’s situation remains difficult. This is because the facility continues to await additional equipment for a 5-megawatt power plant. Again, this would be in addition to the 1.6-megawatt solar plant already present.

Željezara Nikšić is in the town of Nikšić, about 50 kilometers north of Montenegor’s capital, Podgorica. The plant has two 60-ton electric arc furnaces that can produce an estimated 300,000 metric tons per year of crude steel. The facility then sends this product for ladle treatment and vacuum degassing. Finally, the plant casts the liquid steel into billets for rolling into round, square, and flat bars.

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Despite Optimism, Some Exports Issue Warning on Steel Prices, Inflation

State-owned power company Elektroprivreda Crne Gore acquired Željezara Nikšić for €20 million ($21.4 million) in December 2022. The previous owner, Turkish steelmaker Tosçelik, paid the state €15 million ($16 million) for it in 2012, naming it Tosçelik Nikšić. However, the coronavirus pandemic and the resulting drop in orders prompted Tosçelik to suspend the plant’s operation and dismiss staff in early 2021.

blast furnace

Despite positivity around the reopening of the facility, one analyst warned that the poor state of Europe’s steel market in the face of high inflation, as well as rate increases by the European Central Bank, will make it difficult for the plant to obtain new markets once it starts running. The source added that there are also specialty steel producers in nearby Italy as well as imports from Asia to contend with.

Offer prices on hot rolled coil in northern Europe were €650-670 ($695-720) per metric ton EXW for November rolling and December delivery. This is an increase from the €630-650 ($675-695) reported in late August. According to market sources, the increase largely hinges on higher input costs. However, one trader told MetalMiner that low demand means that end users would be unlikely to accept those prices.

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