Liberty Magona to stop production

Liberty Steel's Magona re-rolling mill in Piombino, Italy, will halt output from mid-June as it lacks hot-rolled coil supply, market sources said.

Regular suppliers to the plant have withdrawn, given the company's financial issues. Magona has been unable to source material elsewhere as the market is tight and some sellers are unwilling to risk selling to the company.

ArcelorMittal, from whom Liberty Steel acquired several European assets, including Magona, in order for the former to complete the purchase of Ilva in 2019, had committed supply to those assets under the divestment deal. But when Liberty ran into financial difficulties this year, and as other customers were looking for more material, ArcelorMittal reduced supply to those plants. Reportedly, payments from other Liberty assets to ArcelorMittal stopped, so the latter halted deliveries to the other sites, including Magona.

Liberty had informed some of its clients that it was "slowing down" output, but sources said the mill will stop production fully — one line next week, and the rest in June.

"Due to the situation with Greensill, Liberty Magona has faced significant issues with its main supplier of HRC which has impacted its ability to operate at full capacity, even though its market and demand from customers is strong," a company spokesperson said.

Downstream sellers report that buyers affected by the stoppage have been enquiring about cargoes for immediate delivery.

According to old records, the asset has capacity for 800,000 t/yr of galvanised and pre-painted steel. Market participants say the re-roller has been producing below capacity for years. Its output is destined for use in the automotive, construction, household appliances and industrial sectors, according to Liberty's website.

Company splits Belgian entity

Meanwhile, Liberty is splitting the assets of its Liege facilities in Belgium into two different corporate entities, according to buyers informed by the firm.

The two hot-dip galvanising lines at Flemalle, with a capacity of 950,000 t/yr, will become one entity, while the Tilleur packaging, pickling and cold-rolled lines will be put into another.

Liberty refused to comment.

The existing entity structure has an all-assets pledge to Greensill Capital under its financing facility, so the changes could require permission from Greensill's administrators.

The Liege facility is currently under creditor protection and not supplying many customers. Market participants believe the Dudelange facility in Luxembourg has also entered creditor protection, but the company says this is not the case. Dudelange is still operating, but is requesting that customers provide hot-rolled coil substrate as it has insufficient feed.

By Lora Stoyanova and Colin Richardson