Steelmakers Saarstahl and Dillinger trim capacity

German steelmakers Saarstahl and Dillinger are currently running their two blast furnaces at the minimum that is technically possible in response to dropping demand amid the coronavirus pandemic, the companies said at a joint press briefing Tuesday.

Due to high idling costs and risks of damage to the blast furnaces by doing so, the company decided to keep the furnaces running at the lowest level technically possible. The BFs produce 4.6 million mt of pig iron per year for Dillinger and Saarstahl, both part of parent company Stahl Holding Saar.

During a virtual press briefing on Dillinger and Saarstahl’s 2019 results, board member Martin Baues said Saarstahl’s Voelklingen rolling mill is running at 50% production. The mill has a capacity of 500,000 mt of long steel products per year.

Around 60% of Saarstahl’s products are produced for the automotive industry and the mill does not expect car manufacturers to restart their production before the Easter holidays.

The plate mill in Dillingen is running at slightly less production than usual. Guenter Luxeburger, board member and sales director at Dillinger, said that the order situation would be “decent” but that the platemaker would be seeing drops in incoming orders and that some customers in France and Italy would be refusing to take their deliveries. Luxenburger added that large-scale projects, particularly in the renewable energy sector, would continue.

Both companies already had short-time production schedules for 2019 and this year and will continue to do so.

Last year was difficult for both companies with shipments at Saarstahl dropping 12.4% year on year to 2.1 million mt, already seeing effects from a weak auto sector. Shipments at Dillinger fell by 1.8% to 1.8 million mt.

Restructuring efforts at both companies are likely to be slowed by the current situation. Just ahead of the pandemic, the mills experienced better market conditions compared to last year.

— Laura Varriale