The European steel coil market requires more production cuts in order to prevent prices from falling further amid weak market fundamentals, sources said Sept. 22.
In the week to Sept. 22, the standoff between European buyers and steelmakers continued: Northwest European mills have been reluctant to accept prices below Eur630/mt ex-works and buyers have been aiming for Eur600/mt ex-works.
“The market needs actions from mills, they need to stop furnaces otherwise the market has no chance to recover,” a representative from a European-based service center said.
“The mills most likely would call it ‘planned maintenance’, but it is clear that autumn is not the time for maintenance and that the current prices are the reason.”
A trader said: “Mills have to stop production, with current raw material costs, low demand and strong bearish approach of buyers they have to stop the furnaces …there is no other way to create some shortage of coil and to stimulate apparent demand.”
The comments were made shortly after ArcelorMittal said it planned to temporarily curtail production at Bremen to allow “essential repairs and maintenance” to be carried out.
“ArcelorMittal is finally making moves to cut production, it should have been earlier to prevent the price fall,” an Italian trader. “Without big output cuts European market has no hope of seeing a price recovery.”
In a statement released on Sept. 20, the company said that from Oct. 1 the plant’s blast furnace 2 would be shut for approximately 30 days while the facility’s sintering plant would halt production for a period of 60 days.
From Oct. 9, the company plans to halt production at BF 3 for approximately 41 days.
The two BFs at Bremen have a combined capacity of 3.8 million mt/year.
In an undated statement published on the ArcelorMittal Belgium website, the company also said it had temporarily shut BF A at its steel plant in Ghent.
According to the statement, the production halt commenced on Sept. 14 with the restart of operations planned for the end of November.
The company said the temporary shutdown was necessary to perform essential maintenance required to ensure a smooth transfer of production over to the site’s new direct reduced iron installation and electric furnaces once completed.
“This way we can guarantee that blast furnace A remains operational until after the construction of the new DRI installation and electric furnaces,” the company said.
Platts, part of S&P Global Commodity Insights, assessed domestic hot-rolled coil prices in Northern Europe at Eur630/mt ex-works Ruhr Sept. 21, down 27% since March 30.
Euan Sadden | Maria Tanatar