ArcelorMittal has stopped supplying hot rolled coil (HRC) to the UK's Liberty Steel galvanizing line in Europe as many of the group's other suppliers are also cutting their supplies due to financial problems at the company.
Productivity of supplies from galvanizing lines in Liège-Dudelange has been drastically reduced since earlier last year when ArcelorMittal stopped supplying Liberty Steel. Deliveries were resumed after negotiations. But the company again stopped the shipment of rolled stock due to fear of non-payment due to financial problems of Liberty Steel amid the bankruptcy of the main lender Greensill Capital.
Some Liège-Dudelange clients have been waiting for material to be delivered in May 2020, while others recently renegotiated contracts after Liberty had to pull back from earlier deals due to rising raw material prices.
Liberty Steel will now have to secure open market supply of hot rolled coil - at a time when supply is extremely tight and its finances are in question - if it wants to fulfill these revised deals in the future, depending on existing inventory levels. Some market participants said that current stocks will only last for a few weeks.
This news could push galvanized steel prices in Europe well above ArcelorMittal's recently announced 920 Euros /tonne unless competitive import offers emerge on the market. Liberty Steel today is the main manufacturer of galvanized steel in Europe.
Liberty will temporarily close its special steel business and lay off staff this week to save money, after the company failed to purchase enough scrap this month on a prepayment basis to feed the furnaces. Other divisions of the company in Europe are also in limbo.