Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

The German steel industry is likely to be impacted by floods, with transportation severely affected, suggest media reports. The European market is facing a short supply of steel amid production cuts due to the COVID-19 pandemic. The supply crunch could continue even in the coming months, believe market participants. 


Reports suggest that Hagen, North Rhine-Westphalia was one of the most affected areas, which houses the country’s majority of automotive-linked cold-rollers. 


Many steelmakers have invoked force majeure with the road, rail, and water transport affected. It is very risky for barges to go across the gushing Meuse river. 


Thyssenkrupp has declared force majeure as shipments and distribution of steel in Germany’s Rhine-Ruhr region remain disrupted. In the Duisburg area, at the junction of the Rhine and Ruhr, ThyssenKrupp has its biggest site. Another major steelmaker, ArcelorMittal, has a facility in the same region. 


Earlier, Thyssenkrupp informed of its inability to transport raw materials into and finished steel products out of its facilities in the affected regions. Logistic challenges have impacted feedstock for hot-dipped galvanized coil production. It is likely to wait for the logistic situation to improve before lifting force majeure, as the intensity of impact is still unknown. 


Thyssenkrupp is the biggest steelmaker in Germany. In Q1 2021, the company sold 2.7mn mt of HRC and CRC products. 


In Hagen, cold-roller Bilstein declared force majeure on July 14 following the flooding of its production facilities and transportation challenges for raw materials inflows.


A few participants expect prices to move upwards for spot flat steel despite being at an all-time high. Approaching summer holidays in early September could keep demand steady in the coming days.


Germany is also known to be one of the major exporters of HRC products. According to data by EuroStats, in January-April, the country exported 1.28mn mt of HRC products, up 7.5pc from 1.19mn mt in the prior-year period. The country imported 1.06mn mt of HRC, down by 14.5pc from 1.24mn mt in the prior year. Italy, Netherlands and Belgium were leading importers from Germany.


Impact on ferrous scrap limited 

A leading European ferrous scrap supplier said so far there has been very limited impact on the containerized ferrous scrap trades. Most of the regions affected due to floods have recycling facilities, which supply bulk ferrous scrap cargoes to Turkey and Egyptian buyers. But the demand from the bulk and containerized markets remains slow due to the Eid holidays.

Leave a Reply

Your email address will not be published.