Russian steel producer Evraz Group SA (EVR.LN) said Wednesday it has temporarily closed the steel shop at its Czech subsidiary Evraz Vitkovice Steel from July 1 because of a pricing dispute with ArcelorMittal's (MT) local subsidiary.

Evraz said the closure "marks the current failure in negotiations between Evraz Vitkovice Steel and ArcelorMittal Ostrava over the prices for hot iron" supplied by latter.

Evraz said it "fully proved its commitment for constructive dialogue and accepted ArcelorMittal Ostrava's pricing formula proposal as a basis for further negotiations" but the latter "effectively rejected the proposal" and "officially stated that its position was unchanged."

Evraz said that the closure of the shop with an annual steelmaking capacity of 950,000 metric tons will not affect the plant's rolling production, as slabs will be supplied from Slovakia, Ukraine, Turkey, as well as Evraz's NTMK plant in Russia.

All the steel shop workers will be required to remain in their positions or on standby, so that if agreement with ArcelorMittal Ostrava is reached, they would be able to start up the steel shop immediately, Evraz said.

-By Alexander Kolyandr, Dow Jones Newswires; +7 495 232 9192; Alexander.Kolyandr@dowjones.com
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