Germany’s Riva Hennigsdorf plans to shut down for three months due to the steel market crisis

Weak demand and rising electricity costs weigh on the country's steel industry

German steelmaker Riva Hennigsdorfer Elektrostahlwerke, located near Berlin, is preparing for a prolonged production shutdown due to weak demand in the rebar market and rising electricity costs. According to local media reports, the company may suspend operations for three months in early 2025.

The company has already applied for government subsidies to support reduced working hours for its employees. This will allow the plant to avoid mass layoffs during the downtime.

The situation on the rebar market in Germany has deteriorated amid a significant rise in electricity prices. Another German company, Feralpi, is facing similar challenges. Last week, the Ries plant was forced to suspend operations for two days after spot electricity prices exceeded €900 per MWh. The reason for this was low wind and solar power generation due to cloudy and windless weather.

Feralpi noted that each such outage leads to losses in the six-figure range, and such incidents have already occurred several times this year. However, production at the Riva plant was resumed on Friday.

For Riva Hennigsdorf, however, the outlook looks less optimistic. The extended shutdown early next year reflects the deep challenges facing the European steel industry. Weak demand, rising energy costs and market volatility are forcing producers to revise their production plans and take tough measures to maintain stability.

As GMK Center reported earlier, steel production in the European Union in January-October 2024 increased by 2.1% compared to January-October 2023 to 109.3 million tons. Global steel production for 10 months amounted to 1.55 billion tons, which is 1.6% less than in the same period last year.