Liberty temporarily idles operational Galati furnace

  • : Metals
  • 23/10/17

Liberty Steel has taken its only operational blast furnace at Galati in Romania off line.

"Liberty Galati's BF No 5 has been temporarily idled due to the severe weather in the Black Sea and the dramatically low levels of the Danube which have impacted the delivery of enough raw materials to safely run the furnace," a company spokesperson said.

"We continue to pay employees working in impacted areas as normal and will restart the furnace later this month."

Sources suggested it was scheduled to restart on 24 October.

There has been chatter about the operational rate of the furnace, and the company's other unit at Ostrava in the Czech Republic, for some months. When Liberty closed the largest of the coke ovens at its Ostrava site in September, sources close to senior leadership said it was contemplating idling its EU blast furnaces because of strained working capital.

The company has been importing Russian and Indonesian slab through trading firms and its Alvance arm recently, as it had reduced blast furnace output. Alvance China also has been used to finance raw materials for its Whyalla plant in Australia and the European operations, sources suggest.

A number of local suppliers suggest they are owed money by Galati, according to media reports.

Ostrava's suppliers also have complained that the company is behind on payments. [Asked whether this was correct in April of this year, Liberty told Argus that the European steel market was "experiencing challenging conditions"](https://direct.argusmedia.com/newsandanalysis/article/2441714).

Since then, Argus' benchmark daily northwest EU hot-rolled coil (HRC) index has fallen from €834.25/t to €612.50/t, a decline of €221.75/t. Over the same period, spreads between NW HRC and key blast furnace raw materials have dropped from $514/t to $174/t, a reduction of $340/t. Capacity utilisation also has plummeted, eroding economies of scale. European strip producers are operating at 50-60pc utilisation rates, which are lower than last year, when a number of furnaces were idled because of low apparent demand.


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