Salzgitter Flachstahl production stopped by lightning

Salzgitter Flachstahl's production stopped after a lightning strike interrupted power supply to the plant, the company said in a note to customers yesterday.

A spokesperson later clarified that the mill has declared force majeure.

The mill has restarted production to a "limited extent" but it said there was material damage to various operating units because of the severe strike, which took place on 5 June.

"We can't exclude the possibility of stoppages or delayed deliveries in coming days and weeks," the company said, underlining the point that the event was "an act of god".

"We're working very hard to supply customers as well as possible. In exchange we ask for swift and frictionless offtake," said the letter, signed by chief executive officer Ulrich Grethe and vice chairman of the management board and sales and logistics, Dr Sebastian Bross.

The strike comes at a pivotal point for the northwest European coil market. Demand has quieted of late with companies in the automotive supply chain pushing back on some deliveries amid lower production and semiconductor-driven stoppages.

Frenetic activity has reduced as a result, and the perception prices will be higher going forward has dissipated amid cheaper import offers on cold-rolled coil and hot-dip galvanised coil. However, German steelmaker Thyssenkrupp is relining a blast furnace, and Salzgitter's issues could further constrain supply just as producers have started to whittle away delivery backlogs. This, combined with the likely removal of US Section 232 tariffs on European mills, could continue to support the market.

By Colin Richardson and Brendan Kjellberg-Motton