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Evraz freezes Czech steel production due to low demand

PRAGUE, Oct 12 (Reuters) - Russian steelmaker Evraz has temporarily shut its Czech steel production line due to low demand and the company's effort to run down its raw materials inventory, a spokesman said on Friday.

The economic downturn across Europe has hit the heavy-industry sector as companies and governments curb investment in equipment and infrastructure in a bid to cut debt and costs.

Evraz Vitkovice Steel, the Czech unit of Russia's second largest steelmaker, makes rolled steel products that are used to make cars, build ships and tankers, or construct bridges. The rolling plant remains open.

"The duration of steel shop suspension depends on numerous factors that are now being considered by the management," Vitkovice Steel spokesman Jaromir Krisica said in an email, without elaborating.

European steel industry body EUROFER chief told Reuters in June the European Union's steel industry may need to shut three quarters of its capacity in the next two decades because of declining demand, rising costs and cheap imports.

The Vitkovice steel mill is a key customer of the Czech unit of ArcelorMittal which supplies it with raw materials.

ArcelorMittal is in turn an important customer for coal miner NWR from which it takes 34 percent of its total coking coal production, according to daily Hospodarske Noviny.

Krisica said some employees were sent home with 80 percent of their average wages. Others were transferred to work in other production departments or do maintenance work.

Vitkovice supplied 760,000 tonnes of steel slabs and 824,000 tonnes of rolled products last year.

(Reporting by Jason Hovet, writing by Jana Mlcochova; Editing by Toby Chopra)

((jana.mlcochova@thomsonreuters.com)(+420 224 190 479)(Reuters Messaging: jana.mlcochova.reuters.com@reuters.net))

Keywords: EVRAZ CZECH/