The fires at ArcelorMittal will provoke a deficit of 1 million tons of hot-rolled steel on the EU market

The main shortage of hot-rolled steel in the EU is expected in the summer 2023

European consumers of hot-rolled products expect that recent incidents at two steel plants of the largest steel producer in Europe, ArcelorMittal, in France and Spain, will in the near future provoke a shortage of hot-rolled products on the EU market at the level of 1 million tons. Eurometal reports about it with the reference to Fastmarkets’ data.

As a result of a fire at the ArcelorMittal plant in Gijón, Spain, blast furnace A with a capacity of 2.35 million tons was shut down, and the plant in Dunkirk, France, suspended blast furnace №4.

The company has already sent a letter to customers warning that delays in deliveries of hot-rolled products are inevitable. At the same time, estimates of production losses due to incidents have not yet been determined.

Market sources estimate a possible shortage of rolled steel at the level of 1 million tons, and the main peak of the shortage of products is expected in June-August 2023.

Unplanned shutdowns in Spain and France, as well as planned maintenance at Tata Steel IJmuiden in the Netherlands and ArcelorMittal Dąbrowa Górnicza in Poland, will lead to higher prices for hot-rolled steel in Europe.

On March 22, 2023, due to the fire, ArcelorMittal stopped blast furnace A at the Gijon plant in northern Spain. The BF was restarted at the beginning of February 2023 after being idle since September 2022. As of the end of March, the company started inspection and cleaning of the affected blast furnace. ArcelorMittal said that it has not yet been determined how long BF-A will be out of service. According to local media, the blast furnace will be shut down for at least two months. Blast furnace B at the enterprise continues to work normally.

ArcelorMittal Dunkirk will work temporarily on one of the three blast furnaces after the fire at BF №4 that occurred on March 30. It is noted that BF №4 was not damaged as a result of the fire, the workers were evacuated, and there were no casualties. But during the investigation of the origin of the explosion, the plant will operate with only one blast furnace. Blast furnace №4 is the most powerful at the Dunkirk plant.

As GMK Center reported earlier, as of March 31, 2023, prices for rolled steel in Western Europe were €830-860/t, which is €10/t (+1.2%) more compared to March 24. On the Italian market, product quotations reached €800-850/t, exceeding the previous week’s levels by €50/t (+6.2%).

Product quotations can be maintained at a high level due to limited supply and lack of competition from import suppliers. At the same time, demand is at a weak level.