Mar 20, 2020
STEELMAKERS CUT OUTPUT ACROSS EUROPE AS DEMAND DROPS

European steelmakers are cutting output as a consequence of the coronavirus outbreak’s impact on steel-consuming sectors such as automotive and construction, which are curbing their production.

ArcelorMittal, the largest worldwide steel producer, said Thursday morning that it will reduce production across all its European operations in order to respond to declining demand and to protect workers.

The company when reached by Platts declined to disclose where it is planning to cut productions.

The steelmaker – which had already cut back output at its Italian mill in Taranto earlier in the week, according to sources close to the mill – produced 44.7 million mt of crude steel in 2018 in Europe, but cut this back by around 3% last year.

ArcelorMittal produces a wide range of long and flat steel in Europe, with key sites in the Benelux region, Germany, France and Spain. After Italy, France and Spain have seen the largest impact from the virus in Europe.

In France, according to the local press, ArcelorMittal will decrease steel productions at its site in Fos-sur-Mer and in Dunkerque.

In France, Europe’s largest merchant steel bar producer, the Beltrame group, temporarily closed its French operation, Lamines Marchands Europeens, in Trith Saint Leger until the end of March because of the coronavirus pandemic, a Beltrame spokesperson said Wednesday.

Beltrame has its headquarter in Italy where it suspended its production only for a few days at the hot end of its operations in Vicenza, as well as in its re-rolling units in San Giovanni in Tuscany and in San Didero in Piedmont, until the middle of next week to sanitize the area.

In Italy also the largest global producer of seamless steel tubes, Tenaris-Dalmine has temporarily halted its Bergamo output. Long products maker Feralpi temporary shut down its mill in Lonato, joining the earlier closures of mills owned by Riva, Duferdofin-Nucor, Alfa Acciai, Ferrosider and Valsabbia.

In Germany, Salzgitter confirmed to Platts that it would decrease its flat steel production over the next few days and might take further steps depending on how the situation develops.

Austrian steelmaker Voestalpine said Thursday it would assess the feasibility of keeping production running. German long steel maker Georgsmarienhuette said similarly that production would continue as normal for now, as they had stockpiled raw materials.

Thyssenkrupp board member Oliver Burkhard told local media that the workforce would have to prepare for reduced working hours.

The port of Antwerp, a major hub for steel imports into northern Europe, said it would remain open and that the transport of goods and raw materials would be secure.

Sources however said that long delays have started to occur in transport, particularly by rail and road as many European countries have implemented border controls.

A source at a German cold-roller told Platts Thursday that the stoppages at car manufacturers are likely to be extended beyond the initial two weeks.

“This is dramatic for steel mills. An entire monthly production volume would be missing for them. For direct and indirect steel suppliers to the automotive [sector] it is bad as well,” the source said.

“We expect a reshape of steel production once this is over. The question is steel mills will stop blast furnaces. If they keep them running at a minimum then this will result in material that won’t be used and create oversupply and massively put pressure on spot prices. The second question is if mills will be able to restart quickly enough once demand increases,” the source said.

Steel prices have largely been stable since the height of the outbreak in Europe, but with demand from end-customers dropping sharply due to shutdowns, market sources have become deeply bearish on the future outlook.

— Laura Varriale, Annalisa Villa

Source: Eurometal