Germany-based specialty steelmaker Buderus Edelstahl will reduce its hot-rolled sheet production “significantly” at its Wetzlar site until summer 2020, according to a statement on the website of parent company Voestalpine.
Voestalpine cited the decrease in demand from the automotive industry as one of the main reasons for the production cut, as well as lackluster demand in the mechanical engineering and tool-making industries.
Buderus Edelstahl produced 347,000 mt of crude steel in the fiscal year 2016/17, according to the latest publicly available figures.
“The current cost burden at the Wetzlar site in combination with dropping demand and high price pressure in our product segments is forcing us to act swiftly,” said Franz Rotter, board member at Voestalpine and head of the High Performance division.
The hot-rolled sheet production cut will be used to improve production processes of other products, Voestalpine said.
The Austrian steelmaker published a second profit warning on Monday, announcing writedowns in its steel, auto and DRI assets amounting to non-recurrent impairments of Eur280 million ($312 million) in the current 2019/2020 business year.
Many European steel producers have been hit by the slowdown in the automotive industry, their main customer.
Germany is Europe’s biggest car market and production dropped 9% on the year from January to November this year to 4.39 million cars.
Mill sources told Platts that around 6 million mt/year of flat steel capacity has been taken out of production this year by European mills but most said that the cuts will not be enough to overcome general overcapacity and weaker demand.
Voestalpine did not respond to requests for further details on the production cut.
— Laura Varriale
