Salzgitter announces force majeure on coil supply

German steelmaker Salzgitter has declared force majeure on its coil supply following a fire that shut down the company’s only hot strip mill. This was reported by Argus. Media reports.

In a letter sent to customers on March 4, the company said that the fire occurred on February 28 for unknown reasons, which resulted in the suspension of production.

Salzgitter said that the hot strip mill is unlikely to be able to operate at full capacity until the incident is fully resolved.

As noted, the company is making great efforts and taking all possible measures to ensure supplies and asks customers to take orders quickly and without interruption.

Argus notes that the German steelmaker’s force majeure occurred at a time when the hot-rolled coil market is awaiting the results of the European Commission’s review of safeguards against steel products, which is likely to limit imports.

As a reminder, in the first half of 2024, Salzgitter increased steel production by 6.2% year-on-year to 3.33 million tons. Steel sales in January-June decreased by 10.2% y/y – to €5.24 billion. EBITDA fell by 45.6% y/y – to €233.6 million, while pre-tax profit decreased by 94.6% y/y – to €11.5 million.

As GMK Center reported earlier, Salzgitter AG exceeded market expectations in terms of EBITDA in 2024, reaching €445 million. Despite a decline in total turnover to €10 billion (versus €10.8 billion in 2023) and a significant pre-tax loss of €296 million, the company’s profitability by this key indicator was higher than forecast.