Heavy rainfall and flooding of the Rhine river in the Germany-Benelux area has affected logistics and distribution at several steel businesses, with cold-roller Bilstein declaring force majeure, the company and sources told S&P Global Platts July 15.
Bilstein, based in Germany’s Hagen, declared force majeure July 15 in a customer letter that the company shared with Platts.
“Since the night of July 14, we are facing heavy rain and storms in Hagen, especially at our production sites in Hagen-Hohenlimburg, which already led to damages, defects of material and breakdowns of some production facilities. Furthermore, in the foreseeable future, we can only receive raw material in a very limited way because some of our suppliers are also affected and there are undermined railroad tracks, which prevent us from receiving raw material by rail,” the letter said.
Bilstein said that material can only be dispatched to a limited extent. “The plant shutdowns and shortages of material lead to interruptions of our general production process. Delays in the delivery of your orders are to be expected,” the letter said.
Several videos of flooded steel warehouses at steel service centers and stockholders were circulating on instant messaging between market participants, July 15, which have been shared with Platts.
One cold-roller in Dortmund, Germany, was confronted with excessive flooding of its stainless steel unit July 14, several sources told Platts. The company, BWS Philipp Boecker + Wender Stahl, was not available for comment when contacted by Platts.
Sources also said that parts of Germany’s Thyssenkrupp has been affected by the floods.
Thyssenkrupp told Platts that there has been flooding on Thyssenkrupp’s steel mill grounds and some basements but that water has already been pumped out.
Steelmaker ArcelorMittal who has a site in Duisburg, confirmed to Platts they have been affected by flooding but that production has not been impacted.
Disruption at German stockholder Kloeckner’s company Becker Stahl has also been reported, but a Kloeckner spokesman said that “there have not been any noteworthy damages” at Becker Stahl and that the Kloeckner business has not been affected at all. “There is no disruption of production and no delay in shipments to be expected,” the spokesman said.
“The flooding doesn’t help the actual scarcity in the market of course, highways have been closed and been converted into streaming rivers. Villages have been evacuated and cellars are full of water. The damage is huge in Germany, Belgium and the Netherlands – from Maastricht to Rotterdam,” the source said.
“This will affect prices– we have a lack of material, but we’re lucky it’s not hitting us,” a German buyer said, adding that the inclement weather would lead to further order delays.
North European HRC price were assessed at Eur1,166/mt ex-works Ruhr July 15, down Eur4/mt o n the day. HRC prices have increased by nearly Eur50/mt from the beginning of June.
Since the end of last year, shortages across the coils market have been rampant, with buy and sell-side players clashing over weekly prices increases and depleting stocks. Despite weakening demand seen over the summer, sources are confident of an increase in mid-September, when returning automotive manufacturers are expected to inquire for new orders.
The worst of the flooding was said to be in the German states of Rhineland-Palatinate and North Rhine-Westphalia.
Forecasts expect more heavy rain in Western Europe from July 15-16.
— Amanda Flint, Laura Varriale