Tuesday, 10 Aug 2010
Bloomberg reported that ArcelorMittal Ostrava AS is optimistic it will renew pig iron supplies to Evraz Vitkovice Steel, its biggest customer.

Mr Augustine Kochuparampil CEO of ArcelorMittal Ostrava said that "I believe we're making some progress in talks but not enough to conclude anything yet. I'm generally very optimistic that we’ll be able to close a deal because from a business point of view, it really makes sense for us and for them."

He added that "We need two hands to shake, mine is already there. We have to act as partners and share the profits and share the losses."

Mr Kochuparampil said that ArcelorMittal six year contract with Evraz allows the two companies, whose units are only about 15 kilometers from each other, to currently resettle prices monthly because of market volatility. It also binds the two parties to supply and take in minimum volumes of hot metal when market conditions remain stable.

He added that "We started to see some weakness in June as market sentiment was negatively impacted by the Greek crisis. My assessment is that this is temporary and September is going to be back to normal."

ArcelorMittal Ostrava expects to operate blast furnaces at roughly 80% in June, July and August, compared with full capacity in April and May. The steelmaker was able to mitigate some 50% of lost orders from Evraz for July by selling volumes to other customers.

Mr Kochuparampil said that "We keep our options open in August in case there’s no deal with Evraz." He added that the company will seek to have long-term solutions for its deliveries in September 2010.

Evraz said on June 30th 2010 that it temporarily shut its steel shop following the breakdown of talks with ArcelorMittal Ostrava over the prices for hot iron.

Mr Jaromir Krisica spokesman at Evraz Vitkovice Steel declined to comment on the situation at the moment.