Liberty Steel is expected to shut down 660,000 mt/year blast furnace No. 2 because of the high cost of steel production and low price of rolled steel, with the procuring of raw materials to provide iron smelting operations another factor, according to the sources. The company, which purchased the mill from the Hungarian government in July but has been efectively managing it since February, will use either its own slabs or buy external slabs to keep the rolling mills running.
A Liberty spokesperson did not respond to inquiries from S&P Global at the time of writing.
However, it is not clear whether rolling at the plant currently produces any significant volumes. In June, the mill suspended major rolling mills because of a lack of steelmaking raw materials that Liberty Steel allocated to it. At the time of its acquisition, Dunaferr was running at 30% of capacity with a restart of the idled mills tentatively scheduled for second half of July, but no update has been provided since then.
The blast furnace downtime is planned to last at least three months, during which Dunaferr will reroll slabs and/or hot rolled coils it receives from Liberty’s other mills in Eastern Europe — Galati in Romania and Ostrava in the Czech Republic. The choice of semi-finished feedstock had narrowed for the mill since Russia’s invasion of Ukraine, said one of the sources, adding that before the war Dunaferr was also purchasing slabs from Russia and Ukraine.
“The problem though if Liberty shuts down the blast furnace [is that] the Dunaferr mill will be missing the gas for its slab reheating and rolling operations. And if the coke ovens are suspended too, then they [will] have to purchase natural gas on the free market and this might be too expensive to sustain competitive production,” said the source.
The Dunaferr plant has two blast furnaces with a total capacity of 1.2 million mt/year.
Author Maria Tanatar, Katya Bouckley
