ThyssenKrupp to take Duisburg BF1 down for maintenance

German steelmaker ThyssenKrupp will take blast furnace 1 at its Duisburg site down for maintenance in the third quarter and is informing customers it may have to reduce volumes as a result, market participants told Argus today.

The company confirmed the planned outage but said "the exact details and schedules are currently being detailed". The furnace has a capacity of around 3.6mn t/yr, according to Argus data.

The news runs counter to the narrative of capacity restarting in the next few months as mills look to ease their order backlogs and cash in on historically high steel spreads. The spread for northwest European hot-rolled coil (HRC) over the primary blast furnace raw materials reached $448.34/t yesterday, as softening iron ore bolstered already strong synthetic mill margins.

But there is an expectation the current strength will dissipate into the second and third quarters as automotive demand normalises and import arrivals increase. There is also a degree of uncertainty over what may happen to the EU's steel safeguard, which is due to lapse in June. The CME Group's Northern European HRC forward curve averages €629/t for the third quarter, down considerably from current spot levels — 2Q averages €632/t, with the backwardation flattening in recent days.

The astounding rally in European HRC prices over the fourth quarter was driven by constrained supply, as well as a brisk jump in apparent demand from some integral end-use sectors.

By Colin Richardson