Service centre HDG supply hit by Liberty cancellations

Some European service centres are informing customers that they may not be able to honour hot-dip galvanised supply agreements after Liberty Steel tried to cancel or renegotiate prices for deliveries from its Liege-Dudelange and Magona facilities.

For orders placed in the last three weeks, Liberty has told customers that it cannot maintain lead time and pricing: they either need to cancel the orders, or reorder and pay a fixed price or one based on a market index based on the newly confirmed delivery date. Confirmed orders placed before the last three weeks will be honoured, but with delays.

Liberty has had well-publicised hot-rolled coil (HRC) supply issues into the HDG lines, which it attributes to Covid-19 and "commercial related supply disruptions".

It expects the commercial related disruption to be resolved soon, resulting in deliveries restarting: the attempt to renegotiate galv prices suggests that it is having to pay more for its substrate than previously anticipated.

The company has not received any HRC from its main supplier, ArcelorMittal, since 19 October. Market sources suggest that the company has breached the terms of its deal, leading to the cessation of deliveries. ArcelorMittal refused to comment, and Liberty said that it was not a payment issue.

As a result of the supply problems, Liberty has accumulated delays from the third and fourth quarters, and further substrate supply issues will see these extend further.

By Colin Richardson and Lora Stoyanova