Salzgitter tells customers orders may be refused

German steelmaker Salzgitter has told customers that it remains unable to meet scheduled delivery dates and quantities after weather-related disruption in February.

In the letter, obtained by Argus, the company said adverse weather had caused isolated damage to its equipment, while a railway outage had caused shipping backlogs that could last for several more weeks. The company declared force majeure in early February because of these issues.

"We ask our customers once again for their understanding that, in view of these circumstances, isolated delivery difficulties and delays may occur or orders may temporarily not be accepted or only with an undetermined delivery date," the letter said.

The company has started making hot and cold-rolled coil (HRC, CRC) sales for the third quarter, but remains off the market for hot-dip galvanised coil.

With most mills having delivery performance issues, end-users and service centres are trying to lock in volumes for the third quarter, despite the long lead time and uncertainty over price direction, and the fate of the European steel safeguard.

One maker of large wheels in Germany has been told by a mill — not Salzgitter — that orders scheduled for April will not arrive until June.

This tightness has panicked buyers, which a month or so ago had become more sanguine and expected lower prices.

Argus' daily benchmark NW EU HRC index has risen from €740.50/t to €776.75/t this month, with a €10.50/t jump today. The daily CRC assessment surged by €20/t today to €882.50/t, up from €845/t at the start of the month.

By Colin Richardson