Steel sector reports dramatic first-quarter losses, compounded by debt

The domestic steel sector recorded a net loss of zl.250 million in the first quarter of the year, of which zl.130 million was posted in March alone. Although last year was considered one of the poorest ever for the sector, this year is very likely to be even worse. Steel mill revenues both in Poland and worldwide are down significantly due to the high inventories affecting prices. In the first quarter of the year domestic producers were forced to lower production by 20% compared to the same period last year. Furthermore, steel mills seem to be sinking in a swamp of short-term debts. The share of this most expensive type of loan in the overall credit for the sector increased from 69% in 1999 to 83% in 2000. The steel mills also have to compete with increasing imports from Russia, Ukraine, the Czech Republic and Slovakia. Only with a quick and reasonable restructuring program can the sector obtain assistance from the EU and thus the chance to emerge from its deepening troubles. (Rzeczpospolita, p.B4) M.K.