UK steel mills adjust production amid lower demand due to coronavirus pandemic
UK steel producers have adjusted their output on softer demand, but overall they are still producing despite the COVID-19 outbreak and some restrictions put in place by the government, company officials confirmed to S&P Global Platts on Tuesday.
Among the major UK steel players, Tata Steel, British Steel and Liberty Steel have made some cuts in production, but mainly in areas linked with the automotive sector to adjust to the drop in demand from clients, the companies confirmed to Platts.
In Europe, carmakers and major construction firms are shutting factories and work sites as the COVID-19 pandemic causes disruption to supplies, staff shortages and collapsing demand.
A Tata Steel spokesperson said, “As you will know overall, European steel demand is lower than normal. A number of steel-using manufacturers have paused production, including European car manufacturers.”
“We have therefore reduced production at some of our European mills to match this lower demand. We will continue to operate all four blast furnaces across our two steelmaking hubs — in IJmuiden, the Netherlands, and Port Talbot, Wales. However, liquid steel production will be reduced as a consequence of the sudden drop in demand,” the spokesperson added.
At Port Talbot, Tata Steel has a capacity of 3.5 million mt of crude steel a year. The company did not say how much production has been cut so far.
Also, the second largest UK steel producer, British Steel, confirmed that its two blast furnaces continue to operate. British Steel produces around 2.5 million mt of crude steel a year.
Meanwhile, according to a Liberty statement sent to Platts, the company has decided to suspend its operations only at Liberty Pressing Solutions, Liberty Tube Components and Liberty Aluminium Technologies, which are factories linked with the car industry.
The company decided to suspend production at the beginning of this week, but work will nevertheless continue for the rest of this week on completing customer schedules and ensuring plant and equipment is shut down in a manner that enables an efficient restart when required.
In the UK, Liberty has 1.2 million mt of crude steel capacity from two furnaces in Rotherham.
UK producers in total make about 7.3 million mt of steel a year, around 65% of the UK’s annual requirement. The industry employs 32,600 people directly in the UK and supports a further 41,100 in supply chains.
— Annalisa Villa
Metinvest relies on Italian mills’ restart to avoid Ukraine cutbacks
Ukrainian mining and steel group Metinvest said Tuesday if operations at its Italian plants do not normalize shortly, it will have to cut production in Ukraine.
Saleable steel production at Italian plate and coil mills Ferriera Valsider and Trametal, owned by Metinvest, will reduce production to 40,000 mt during operations downtime due to the coronavirus pandemic.
Operations at the plants are to restart April 3 unless they are subject to further restrictions by the Italian government, says Metinvest.
Semi-finished steel inventory accumulated at the mills are sufficient to ensure speedy restart of the full-fledged rolling once this is allowed by the government and justified by demand.
However, should Italian government choose to re-instate quarantine at some point after April 3 and should European steel market remain unstable, Metinvest will be forced to cut production at its Ukrainian mills too. Such a decision would affect Azovstal in the first place as the steelworks is the one in tight synergy with the Italian re-rollers whom it supplies with slab. Metinvest does not exclude temporary stoppage of slab casting at Azovstal if the situation in Italy and Europe does not improve soon.
April will be a key month for certain decisions based on the company’s order volume and market sentiment. In April, Metinvest may consider blowing down blast furnace (BF) No.3 at Azovstal and delay the restart of revamped mill’s BF No.4 until May (this was expected to come on line in April). At Ilyich steelworks, restart of BF No.4 can also be postponed till May. In case BF operations slow down, Metinvest will export any iron ore feedstock surplus, including to China, it said.
— Ekaterina Bouckley
US rebar distributors view infrastructure bill as boon
US rebar distributors believe that government stimulus may help guide the market through the uncertainty surrounding the coronavirus pandemic, Kallanish reports.
A Northeast distributor notes that “…investment in infrastructure by the government can help keep the market afloat during this time.”
Specifically, the distributor mentioned an infrastructure bill proposed this week by US President Donald Trump, which intends to focus on the rebuilding of the nation’s deteriorating infrastructure, as a means of spurring the economy (see related story).
“I see the [infrastructure] bill as a way for the government to provide economic growth, despite the barriers needed to fight the virus,” says the distributor.