Acerinox temporarily suspends steel production in Spain

Global producer of stainless steel and high-strength alloys, the Acerinox Group, plans to temporarily stop steel production at its smelter in the city of Los Barrios, Cádiz province, starting October 12, 2024. This is reported by EUROMETAL.

The corresponding decision was made after concluding an agreement on the temporary reduction of jobs with employees, Spanish media reported, citing sources in the company. The main reason for stopping production is the drop in demand and the loss of customers. The company has not yet made an official comment on this situation.

The hot-rolled mill will cease operations on October 12, and the cold-rolled mill may stop later, depending on further market conditions. This stoppage is part of an agreement between the unions and the management of the company, which the parties concluded back in July 2023 and which will be in effect until 2027.

The Los Barrios plant is part of Acerinox’s global network of manufacturing facilities, which includes stainless steel plants in Spain, the United States and South Africa, as well as high-performance alloy plants in Germany. The total capacity of the company’s smelting shops is 3.5 million tons per year.

In addition to halting production in Spain, the company also confirmed that it suspended operations of its Bahru Stainless unit in Malaysia in May this year, also due to lower demand for its products. Currently, it is known that the unit is planned to be sold for $95 million to Malaysian Worldwide Stainless.

The current economic situation and the decrease in demand for stainless steel in the global market are affecting the production plans of many companies, and Acerinox’s solutions are only part of the process of adapting to the new conditions.

As GMK Center reported earlier, the world production of stainless steel in 2023 increased by 4.6% compared to 2022 – to 58.4 million tons. Europe, including Ukraine, decreased the production of stainless steel by 6.2% compared to 2022 year – to 5.9 million tons, the figure decreased by 9.6% y/y – to 1.82 million tons, China – increased by 12.6% y/y, up to 36.68 million tons.

In 2024, the consumption of stainless steel in the Europe/Africa regions is expected to decrease by 4.7% y/y, mainly due to a significant decrease in demand for long stainless steel products – by 13.9% y/y.