Going through AG Metal Miner
As markets brace for more bad steel news, ArcelorMittal plans to idle one of the two blast furnaces at its Fos-sur-Mer site in southern France. The Luxembourg-based group said on Nov. 4 that the move was a direct response to current market conditions.
“In a greatly deteriorated macro-economic context, coupled with a major impact from soaring energy prices and an increase in steel imports in Europe, the Fos-sur-Mer site is, in turn, faced with a slowdown in demand for steel. Order forecasts are down for late 2022 and early 2023,” the group said in a statement.
According to Bruno Ribo, CEO of ArcelorMittal Méditerranée, BF n°2 will be stopped from December until market conditions allow it. The ArcelorMittal Méditerranée operation includes Fos-sur-Mer and the special steel producer Saint Chély d’Apcher.
The Fos-sur-Mer blast furnaces each have a heather diameter of 11.8 meters. They can produce a total of 7,000 metric tons of cast iron per day. The plant has an estimated design capacity of 60 million metric tons per year of crude steel, which it casts into slabs for hot-rolled coils using two 335 metric ton basic oxygen furnaces.
Steel News Focuses on Asia Shutdowns and Supply
The planned idling of Fos-sur-Mer follows several other ArcelorMittal closures. From September, the company began closing sites in Germany, Poland, France and Spain. As with other commodity makers, the poor economic outlook remains the main reason for these moves.
Related: Bitcoin Facing an Existential Crisis as Exchange Collapse Continues
The deepening global recession and imports from Southeast Asia continue to put downward pressure on HRC prices across Europe, which means more bad news for steel. By the end of October, mills were offering flat-rolled products at €700-720 ($695-715) per metric ton EXW. This was down from the €740-750 ($735-745) prices seen in late September. At the end of September, HRC transactions from Vietnam reached €680-685 ($680-685) per metric ton CIF for Bilbao and Antwerp. It should be noted that these figures were also for delivery in January.
It has also been reported that the latest offers from factories include delivery. As a trade source noted last week, Chinese factories were offering European ports at CFR$585. Meanwhile, European Union anti-dumping measures continue to target Chinese steel imports. The source said this would reduce the likelihood of HRC’s latest offerings having a direct impact on markets within the 27-member bloc.
“But it puts pressure on FOB prices in Asia, of course,” the source added, clearly expecting future problems for the world’s second-largest economy.
By Christopher Rivituso
More reading on Oilprice.com: