Liberty Steel to stop production at Dunaferr for three months

Hungarian steel mill Dunaferr is to halt production for three months due to low steel prices and a general unfavorable market situation. S&P Global reports about it with the reference to the letter of the CEO of the enterprise to the trade union.

According to the letter, the company plans to suspend steel production at the steel plant. The company’s rolling mills will be shut down after rolling the remaining slabs and re-rolling the hot-rolled coil stocks, and the work of Dunaferr’s coke-chemical division will be reduced to a minimum. Liberty Steel did not respond to S&P Global’s request for comment.

Liberty Steel is decommissioning the only blast furnace in operation at the recently acquired Dunaferr steel mill in Hungary. The company attributed this to the unsustainable cost of production, given the low rental prices.

Also, British Liberty won the tender to acquire Hungary’s Dunaferr in mid-July 2023, offering €55 million for the company. At the last stage, it competed with Vulcan Steel, a private company based in Mauritius. Metinvest group, which was one of the applicants for the purchase of the plant, stated that the tender from the beginning did not meet the criteria of transparency, was conducted in a very short time, information for participants was limited. The company also noted that the cost of the plant is about €200 million.

As GMK Center reported earlier, at the end of December 2022, the Municipal Court of Budapest made a decision to liquidate Dunaferr ISD. This was preceded by amendments to the Hungarian Bankruptcy Code, which were adopted by the government. The plant received a temporary administration.

Steel plant has been idle since the third quarter of 2022. In December 2022, the Hungarian authorities asked Liberty Steel to ship coal to Dunaferr in order to avoid shutdown of the plant’s coke batteries, limited volumes were delivered to the company. In February 2023, the plant restarted blast furnace №2 and the cold rolling state, in March – the hot rolling state. Blast furnace №1 will remain idle, probably forever, due to irreparable damage the unit suffered as a result of the prolonged shutdown.

In June 2023, Dunaferr continued to work in conditions of limited capacity, as the bidding process for the steel plant continued.