Dunaferr eyes September output rebound, strategic investor

Steel demand could rebound from the Covid-19 impact after the summer, ensuring sufficient sales to ramp up production, according to ISD Dunaferr corporate manager Evgeny Tankhilevich. The low level of orders has caused the producer difficulties in recent weeks, compounded by imports into Europe.

The executive also hopes the steelmaker finally secures a strategic investor following a period of searching that has included a number of due diligences. This investor should be an experienced steelmaking group with captive raw materials. “There should be of flurry of M&A activity this year, and I just hope that Dunaferr is on the wish-list of a good strong company,” Tankhilevich tells Kallanish.

“The German, Polish, Austrian, Czech, Italian and other key markets have restarted, but demand is rising only slowly,” Tankhilevich says in ISD Dunaferr’s latest newsletter. “The extremely low volume of orders is still causing significant difficulties. In addition, demand is being negatively affected by imports into Europe. I believe that the next three months will be extremely difficult; it will take that long for the market to fully recover and for the European Commission to take decisive action on import dumping.”

“In the short term, we are talking about survival,” Tankhilevich continues. “We are in the same situation as most vertically integrated steelmakers in Europe. But I’m optimistic; I think the pre-epidemic market situation could be restored by the end of the summer, and by then we can get enough revenue to sustain production.”

With lower production seemingly “… unavoidable” in summer, ISD Dunaferr will use the time to carry out all maintenance planned for 2020 on the blast furnace, continuous caster and hot rolling mill. The firm wants to be ready to resume output at full capacity from September.

The steelmaker plans to apply for government support to temporarily reduce working hours for workers not directly working in production. However, its face-to-face negotiations with authorities over longer-term strategic issues have been hampered by the pandemic.

ISD Dunaferr’s finished steel sales fell -11% on-year in 2019 to 1.46 million tonnes, with crude steel output down -15% to 1.42mt.