Spain temporarily halts steel production

The Spanish Government has temporarily suspended steelmaking and metal manufacturing in the country as a “… non-essential” economic activity. The measure came into force on 30 March for at least a 15-day period. The new extreme measures to prevent the spread of Covid-19 in Spain are creating considerable uncertainty in the steel sector, representatives from the industry tell Kallanish.

Spanish steelmakers’ association Unesid has asked the Ministry of Industry and Commerce for clarification of the royal decree because it creates uncertainty in the sector, the president of Unesid Andrés Barceló says.

“There are critical plants that cannot be stopped and are not included in the decree. Nor can [… these] comply with the time stipulated by law to make such stops, since specific security plans are required to do so,” Barceló says. The decree also fails to clarify how to proceed once the facilities are halted, as these require minimal maintenance and security services, while the presence of all the workforce is banned, he continues. “We have also asked the government for an urgent system to carry out the supply and loading of material already produced and to guarantee steel arrivals [… from overseas] which are arriving at Spanish ports in the coming days,” the Unesid president adds.

All of the monitored large Spanish steelmakers confirm that they are preparing to put their furnaces in ‘hot idle’ mode until the resumption of operations. “We are evaluating the expected impact on our activities,” an ArcelorMittal spokesperson says.

“Our activity is not included as essential in the royal decree, so Gallardo Balboa is taking all the indicated measures to comply with the law. A halt in the production chain takes time to do diligently and we have 24 hours to adopt such measures,” the Gallardo Balboa steelmaking group confirms.

Other steelmakers such as Celsa, Megasa, Tubacex and Acerinox, are awaiting a possible last-minute exception or a new legal interpretation of the decree in support of the steel industry, Kallanish understands.