Steelmaker ArcelorMittal will idle a 1.5 million mt/year blast furnace at its site in Dunkirk, France, from July 11, a spokesperson said June 21, leaving capacity of 5.7 million mt/year operational at the site.
The idling was due to “marginally weaker real demand, specifically in the automotive sector due to ongoing supply chain issues”, the spokesperson said.
Hot-rolled coil in Northern Europe was assessed by Platts at Eur875/mt ($921/mt) ex-works Ruhr on June 20, down from a peak at Eur1,460/mt on March 18, according to S&P Global Commodity Insights data.
Demand from end-users has been low, with the automotive industry’s steel consumption hit by a shortage of various components. Distributors have high stocks of coil due to panic buying earlier this year and subsequent limited demand from end-consumers that has weighed on prices for the past three months, sources said.
The stoppage of one furnace at Dunkirk would not be enough to solve the problem, one trading source in Italy said, adding that the mills needed to be more active about production cuts.
“Mills did the same during lockdown in 2020. They responded swiftly by announcing production cuts and stopping the furnaces,” a Northern European source said. “Now they seem to be reluctant to make a decision. Some expect a recovery in a couple of months, but I think that, in reality, they will have to stop furnaces.”
One mill source was, however, skeptical about furnaces stoppages due to high costs linked to capacity reductions and emission policies becoming stricter in the EU.
— Annalisa Villa, Maria Tanatar, Benjamin Steven
