The fire occurred at the hot-rolling mill at Salzgitter Flachstahl in southeast Lower Saxony, Germany on February 28, the company said in the letter.
The cause of the incident was not disclosed.
“Due to damage and consequently the necessary emergency reparations, production in our hot-strip mill is currently disrupted,” the letter reads.
“Since our integrated steel mill doesn’t have additional hot-strip mills, the production plants that follow the hot-strip mill within our production process will presumable not able to produce with full capacity until the necessary reparations are complected,” it continues.
The company said it hopes to resume operations “as soon as possible,” but did not specify a timeline.
Salzgitter’s spokesperson did not reply to Fastmarkets’ request for comment before the time of publication.
Salzgitter Flachstahl, located in the city of Salzgitter is the company’s major steelmaking asset in Germany, comprising three blast furnaces with a combined capacity of more than 4 million tonnes per year of pig iron. The Flachstahl facility produces about 3.5 million tpy of hot-rolled coil, 1.8 million tpy of cold-rolled coil and 1.4 million tpy of coated flat steel, according to Fastmarkets data.
Expected supply tightness bullish for prices
Market sources told Fastmarkets that the incident at Salzgitter, as well as limited imports amid a steel safeguards review could support domestic flat steel prices up further in Germany.
Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe at €629.04 ($662.47) per tonne on Tuesday, up by €1.12 per tonne from €627.92 per tonne on the previous day.
The Northern European index was up by €8.41 per tonne week on week and by €35.29 per tonne month on month
Official offers were reported at €640-660 per tonne delivered (€630-650 per tonne EXW) in Germany, with a transaction heard done at €630 per tonne EXW earlier this week.
Downstream products prices – CRC and HDG – has already started reacting on news about supply disruption.
According to industry sources, the tradeable market price for both CRC and HDG in Germany this week was close to €740-750 per tonne delivered, which would net back to €730-740 per tonne ex-works.
The official offers of the German mills for mid-May/June delivery CRC and HDG were heard at €750-760 per tonne delivered, which equals €740-750 per tonne ex-works.
By comparison, Fastmarkets’ weekly assessment for steel cold-rolled coil domestic, exw Northern Europe stood at €690-710 per tonne ex-works on February 26, two days before the incident.
And Fastmarkets’ weekly price assessment for steel hot-dipped galvanized coil domestic, exw Northern Europe was at €710-735 per tonne ex-works on February 26.
