Spanish metal groups could face a further shutdown after measures in Spain to contain the spread of the COVID-19 virus were further extended, via a decree in the State Gazette (Boletin Oficial del Estado) Sunday.
Following two weeks of restrictions on individuals’ movements and work, the Spanish government further tightened its containment measures for COVID-19 and extended the duration through to April 9.
The new measures includes the closure of all industrial sites except for those that produce sanitary materials, food or other products for essential activity.
However, Spain’s largest metal producers said it was still unclear which parts of their production might have to close.
A spokesman for Alcoa, Spain’s largest aluminum producer with a 228,000 mt/yr unit at San Ciprian, told S&P Global Monday that the company is confident it will be considered essential and is working on ensuring that will be the case.
A steel industry source also noted said that the group was working on defining which industries would be allowed to continue operating. The groups are waiting for clarifications from the country’s Industry Ministry, after the new restrictions were only published just before midnight Sunday. Spain’s latest order will give the industries one day to make the necessary adjustments and preparations during Monday March 30, given that the order was passed late Sunday night.
Scrap dealers said they can still operate, collecting scrap even in the most virus-hit area such as Madrid, but they also underscored that the situation was fluid.
Sources said that most of steelmakers are still working but however some have started to cut productions.
Among the main domestic steel players that have cut productions according to local sources are ArcelorMittal that reduced its production in Sestao, suspending its 1.8 million mt a year EAF, as well as special long steel producer Sidenor that has temporary shut down its production in Vitoria and Basauri. ArcelorMittal and Sidenor were not available to comment.
Much of the country’s manufacturing industry, such as autos, have already closed in the previous two weeks, meaning metal demand and steel prices within Spain has already been impacted.
The Platts TSI hot-rolled coil index was calculated Friday at Eur444.50/mt ($492.28/mt) ex-works S. Europe, a decline of Eur11/mt since March 2. Hot-rolled coil in northern Europe has fared marginally better in March declining Eur7/mt within the month and was assessed Friday at Eur475.50/mt ex-works Ruhr.
Also Spanish power demand, of which around half is attributed to industry, has been slipping progressively since before the emergency measures were put in place on March 16.
For the five Mondays of March, daily demand has fallen from around 706 GWh on March 2 and 700 GWh on March 10 to 664 GWh on March 16, 619 GWh on March 23 and now to 593 GWh for March 30 — or a drop of 16% from the first Monday to the fifth.
— Gianluca Baratti, Annalisa Villa, Len Griffin
