BELGRADE, June 11 (Reuters) – The only Serbian steelmaker, Zelezara Smederevo, announced on Friday that he plans to restart one of its two furnaces which had been closed last year due to a drop in demand caused by the COVID-19 pandemic.

In a statement, the owner of the HBIS Group Serbia plant, a branch of Hesteel 000709.SZ, China’s largest steelmaker, said the Zelezara Smederevo furnace will be restarted on August 16, as markets improve.

“The current market situation has created favorable conditions for the launch of the No. 1 blast furnace, the production volume of which will depend on market demand,” he said.

In 2016, Hesteel paid 46 million euros for the then loss-making plant with a capacity of 2.2 million tonnes.

Beijing is considering Serbia as part of its One Belt, One Road initiative, which aims to open new trade relations with Chinese companies.

China has so far invested billions of euros in the Balkan country and the candidate for EU membership – mostly in soft loans, infrastructure and energy projects.

(Reporting by Aleksandar Vasovic, edited by David Evans)

((aleksandar.vasovic@thomsonreuters.com; +381113044904;))

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