Liberty Steel is idling the only operational blast furnace at its recently acquired Dunaferr site in Hungary, as well as the steel plant, the company told employees today.
Liberty said the cost of production is unviable, given low finished steel prices. Argus' benchmark northwest EU hot-rolled coil index was €634/t on 7 August, and has fallen consistently since early April, when it reached €850.75/t.
Liberty only won the bidding process for the stricken mill in mid-July, buying it out of liquidation for €55mn. In the last stage of the bidding process, it was competing with Vulcan Steel, an entity close to Naveen Jindal. Ukraine's Metinvest, which was eliminated from bidding in an earlier round, said the value of the plant was close to €200mn.
Availability of iron ore and slab has been an issue in recent months. The rolling mills were idled last month because of a lack of raw materials, and a weak order book.
Liberty has recently been buying Asian coke for its Galati mill, which also receives coke from Dunaferr. Coke-making will continue in order to keep supplying Galati, sources close to the company said.
The sale of Dunaferr was conditional on the continuation of the debtor's economic activity. The site's rolling lines are now operational.
A Liberty Steel spokesperson declined to comment on the stoppage, or on how long it would last.
