German crude steel output drops 10% on year in February: WV Stahl

Weather disruptions took their toll on Germany’s crude steel production in February as output dropped 10% year on year, according to data published by German steel federation WV Stahl March 22.

The drop to 3.1 million mt in February put an end to the continuous production increase following ramp-up efforts by German mills once steel demand came back in mid-2020.

WV Stahl said the recovery of German steel production remains “volatile.”

The drop in crude steel production could be seen in blast furnace as well as electric arc furnace production. BF-based production decreased 9.9% year on year to 2.1 million mt, while EAF-based output fell 11.3% on year to 991,000 mt. Pig iron production fell 8.4% to 1.9 million mt.

Hot-rolled production fell 5.9% year on year to 2.8 million mt, the data showed.

German mills were severely hampered by adverse weather in February with steelmaker Salzgitter declaring force majeure in February. Severe disruptions caused rail tracks to block, truck deliveries on hazardous goods temporarily banned and waterways disrupted as well.

“It was two weeks of mills having to produce at minimum level because materials such as gases couldn’t get delivered,” a German market participant said.

“This led to worsening backlogs, and those were already long,” the source said, adding that normally mills would be able to make up for performance issues, but because the material shortage has continued to mount, this was no longer possible.

“I do expect a bounce-back in March however,” the source added.

Lead times across European mills were currently in August as mills try to meet demand. The market usually has an eight- to 12-week delivery time.

The persistent material shortage boosted Europe’s steel price rally, with the Platts hot-rolled-coil assessment for EXW Ruhr close to reaching its all-time high at Eur795/mt EXW Ruhr March 19, Eur5/mt below its record seen in June 2008.

— Laura Varriale