Red Sea crisis spares German steel for now

Germany’s steel industry has not yet been affected significantly by the Red Sea shipping disruption caused by Houthi and pirate attacks on vessels trying to access the Suez Canal. Many vessels have opted to take the longer route around the Cape of Good Hope, or are considering to do so.

Thyssenkrupp Steel has not yet experienced supply bottlenecks, the company said in a statement published by Reuters. The news agency stated that the group is nevertheless thinking about alternatives, should the situation escalate. “The logistics departments of our units are in close touch with transportation partners to be able to react flexibly,” it quotes the company as saying.

Thyssenkrupp did not reply to inquiries from Kallanish.

Effects further downstream in the steel supply chain are being anticipated by market players. “The detour around the Cape will cause extra costs for transport, and, not least, for insurance,” a manager of a cold-roller company points out to Kallanish. This will mean higher prices for steel imports, “and I believe that [ArcelorMittal] is already taking advantage of this circumstance with its latest price increases”, he adds.

Christian Koehl Germany