Day: 26 August 2020

Voestalpine will in early September restart the small blast furnace in Linz which has been idle since March, following the abrupt slump in customer demand caused by the Covid-19 pandemic.

The gradual revival of demand is most pronounced in the automotive, electrical, and processing industries, and has led to an increased need for high-quality steel grades, making this step possible, the company states. The first signs of recovery are also evident in the mechanical engineering and energy segments, for which the site in Linz also produces high-quality steel products, Kallanish understands.

Together with the two other blast furnaces at the site, the restart of the small blast furnace brings steel production back up to almost normal levels, after capacity was throttled back following Covid-19. Together they have an annual pig iron production capacity of around 5 million tonnes. Another two blast furnaces at the site in Donawitz have a capacity for up to 1.5m t/year of pig iron.

Voestalpine says the economic recovery is impacting the group differently according to region and market segment. The railway systems and high bay warehousing technology sectors are performing well, while in contrast the aerospace and oil & natural gas industries have been particularly hard hit by the impact of the pandemic.

The production of seamless tube for the oil & gas industry has been facing a competitive disadvantage due to protectionist tariffs since 2018.

Swiss steelmakers’ exports to neighbouring countries are facing new limitations after the EU tightened safeguard restrictions.

Although sitting centrally in Europe and surrounded by EU countries, the Alpine country itself is not a member of the Union. It is therefore subject to the same restrictions as other third countries such as Turkey and Belarus.

“Switzerland is being treated like any other third country, although production costs here are actually higher,” Stahl Gerlafingen managing director Alain Creteur bemoans in an interview with Solothurner Zeitung. “And the [EU] steel industry is even demanding stricter regulations.”

He cites the example of sections, for which the EU has imposed a limit of 16,000 tonnes for imports from Switzerland. Stahl Gerlafingen has an annual production capacity for sections of 300,000 tonnes, of which three quarters used to be for export. “It’s a disaster,” Creteur exclaims.

Meanwhile, Schmolz+Bickenbach’s Swiss Steel seems to be hurting less from the EU restrictions, it tells Kallanish upon request. Its greatest pain is the drop in demand for SBQ steel from the ailing automotive industry. This has been worsening since the Covid-19 lockdown of assembly lines at carmakers.

“With demand as low as it is, the stricter safeguards don’t mean additional pain,” an S+B spokeswoman says. Also, with its diverse locations in EU countries like France and Germany, S+B group can easily handle deliveries within the EU from units other than Swiss Steel.