European buyers expect 1 million tonne HRC shortage due to ArcelorMittal fires

European steel buyers expect HRC supply to get increasingly tight in the summer months due to the recent fires at ArcelorMittal’s Spanish and French sites, sources told Fastmarkets on Tuesday April 4.
In the past two weeks there have been two fire incidents at ArcelorMittal’s steelmaking facilities.

The first one affected a 2.35 million tonne per year blast furnace (BF) A in Gijon, Spain, and the second one halted operations at BF 4 in Dunkirk, France, Fastmarkets reported.

Earlier in the week the company sent its customers a letter warning that delivery delays for flat steel in Europe were “unavoidable” and that allocations for new orders are likely to be reduced.

The company did not provide estimates of production losses resulting from the disruptions.

Sources, however, expect 1 million tonnes of HRC shortage, with peak supply tightness anticipated during June-August, Fastmarkets understands.

ArcelorMittal declined to comment on the matter.

The unplanned stoppages in Spain and France, along with scheduled maintenance at Tata Steel IJmuiden in the Netherlands and ArcelorMittal Dabrowa Gornicza in Poland are expected to increase HRC prices in Europe, sources said.

“Right now nobody is paying the €900 [per tonne EXW] that some producers are asking for, but we are heading in that direction,” a buyer in Europe said. “The supply issues will start to bite when buyers come back to restock for July.”

Other sources were concerned that tight supply remains the major price driver, while consumption remains subdued.

“Stabilization [of HRC prices] at a high level is a more likely scenario, given the lack of consumption,” a steel service center said.

Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe at €855.88 ($929.14) per tonne on Monday, down by €0.37 per tonne from €856.25 per tonne on March 31.

Published by: Julia Bolotova