German steel processors see production stoppages due to undersupply: WSM

German steel processors are experiencing production stoppages due to the severe material shortage the European steel sector is currently facing, German steel processing association WSM said May 21.

Around 98% of steel and metal processors in Germany are have difficulties in buying steel, with 89% affected by production cuts, according to a WSM member survey. Around 87% cannot meet deliveries to customers anymore, according to the survey.

More than 80% of German processors believe steel producers, as well as customers in the automotive and mechanical engineering industries, have underestimated the economic recovery following the first pandemic-related shutdowns, the survey showed.

Bottlenecks can be seen in annual contract volumes and particularly in additional volumes, WSM said in a statement. One claim from steel processors in the survey was that steel mills would be “limiting material availability artificially,” it said.

Mills have been vehemently denying claims of keeping production curbs, saying that most producers would be running on full capacity.

“The results of the survey are alarming,” said WSM Chairman Christian Vietmeyer. “The steel supply has to speed up to meet increasing demand. The steel processing industry is already experiencing production stoppages. This is poison for the economic recovery that we need. We need urgently more steel and raw materials.”

Steel prices have continued on all-time highs for more than eight weeks, resulting from demand outpacing production rates since summer 2020, when demand started to pick up after widespread pandemic-related shutdowns. The daily Platts hot-rolled coil assessment stood at Eur1105/mt EXW Ruhr, May 20, seeing a Eur145/mt surge in a month, increasing continuously from the lowest point in June 2020 at Eur396/mt EXW Ruhr.

— Laura Varriale