According to data released on March 22 by German Steel Federation WV Stahl, weather disasters affected crude steel production in Germany, as production fell 10% year-on-year.
The fall to 3.1 million tonnes in February put an end to continuous production growth following an increase in production at German facilities following a rebound in steel demand in mid-2020.
WV Stahl said the recovery in steel production in Germany remains "fragile".
The decline in steel production was observed in blast furnace production, as well as in the production of electric arc furnaces. Blast furnace production fell 9.9% year on year to 2.1 million tons, while blast furnace production fell 11.3% to 991,000 tons. Pig iron production fell 8.4% to 1.9 million tonnes.
Hot-rolled steel production fell 5.9% YoY to 2.8 million tonnes, according to the data.
German factories were hit hard by unfavorable weather conditions in February when steelmaker Salzgitter announced a force majeure event. Due to serious disruptions, railways were blocked, the delivery of dangerous goods by trucks was temporarily prohibited, and waterways were disrupted.
“It was two weeks when factories had to produce at a minimum level because materials such as gases could not be delivered,” said a German market player.
“This led to a worsening of unfinished orders, and they were already long,” the source said, adding that usually mills could compensate for productivity problems, but as the shortage of materials continued to grow, this was not possible.
“I still expect a recovery in March,” the source added.
The lead times for European factories are currently in August as factories try to meet demand. Market delivery times are typically eight to 12 weeks.
Constant material shortages have pushed steel prices up in Europe, with Platts' valuation of hot coil for EXW Ruhr close to a record € 795 / t EXW Ruhr on March 19, down € 5 / t below its June 2008 record.
