Spanish steel production in March fell 23% year on year to 1 million mt, a fifth consecutive decline, as production was affected by record high energy prices and a transport workers’ strike, according to data published May 24 by industry group Unesid.
In mid-March, a number of steel producers halted production for several days due to these factors. While the strike prevented deliveries to and from industrial sites for a few days, the cost squeeze forced producers to halt their plants during the largest spikes.
Spain’s steel sector is Europe’s fourth-largest with production of 13.1 million mt in 2021.
Power prices spiked to more than Eur350/MWh over the March 5-10 period, taking the average for the month to a record high of Eur283.30/MWh, up from Eur200/MWh in February.
Spain’s largest steelmaker ArcelorMittal Espana told S&P Global Commodity Insights in March that it had halted its 4.5 million mt/year Gijon plant for five days due to the high prices, while stainless steel maker Acerinox said during its May 11 earnings call that it had halted production for three days due to high power prices and two days due to the strike.
Unesid also reported reduced rates or halts at Megasa (3 million mt/year capacity), Grupo Celsa (2.5 million mt/year capacity) and Siderurgica Balboa (1.3 million mt/year), among others.
The slowdown in March also affected steel recycling, which fell 26% year on year to 747,000 mt, according to Unesid, also a fifth consecutive monthly decline.
Since March, Spanish power prices have receded to an average Eur191.52/MWh in April and Eur189.22/MWh so far in May, with new legislation due to come into force in June to reduce power bills by 15%-20%.
— Gianluca Baratti