Liberty Liege-Dudelange supply disruption causing steel shipment delays

The Liberty Steel Group is experiencing supply disruption at its Liege and Dudelange mill sites in Belgium, affecting shipments to customers, Liberty confirmed to S&P Global Platts Nov 26.

“Continuing COVID-19 and commercial related supply disruptions have temporarily impacted shipments from Liberty Liège-Dudelange,” a Liberty spokesperson said.

“We apologise to any customers impacted by this issue and expect shipments to return to normal soon,” the spokesperson said.

According to market sources, the supply of galvanized coils is particularly impacted and primarily caused by pre-material supply problems.

“It’s the feedstock issue they have,” said a German stockholder.

A UK trading source said customers received a letter from Liberty saying that their requested volumes for Q1 delivery could not be delivered. “An astonishing amount of volumes. The situation is not helping the material tightness in Europe,” said the trader.

Customers looking at other mills

A European mill source said that customers from Liberty were now trying to source the material elsewhere but due to the serious lack of material available on the market are unlikely to be successful. There is little coil availability left for Q1 and while there are some offers for April delivery for hot-dipped galvanized (HDG) material, most European mills are still out of the market for Q2.

The European coils market is currently facing severe material tightness while mills are working through an orders backlog. European mills are still running production below full capacity utilization following production cuts during the first wave of the pandemic. There is also a lack of imported material with import sources such as Turkey hiking offers on spiking scrap prices.

European coils prices have jumped over the last few weeks following mill price hikes, with the daily Platts index for hot-rolled coil at Eur548/mt EXW Ruhr Nov 26, seeing a Eur6/mt increase on-day, while the weekly Platts hot-dipped galvanized assessment increased Eur9.50/mt on-week Nov 25 to Eur640/mt EXW Ruhr for DX51D grade. Both HRC and HDG have increased by more than Eur150/mt since the lowest point in June this year with further price increases expected.

Not the first delivery disruption

The supply problem for the production of galvanized coils has been a recurring issue at Liberty. The company confirmed to Platts in February that there were temporary supply issues.

The operations at Liege-Dudelange were bought from steelmaker ArcelorMittal in July 2019 in a Eur740 million ($707 million) deal and were part of the remedy package imposed by the EU for ArcelorMittal to take over Italy’s Ilva.

According to analysts at Jefferies Research Services, Dudelange and Liege in total have annual capacities of 1.6 million mt of galvanized/coated steel, 300,000 mt of cold-rolled coil and 200,000 mt of tinplate.

— Laura Varriale