Liberty looks to sell or recapitalise EU rolling lines

Beleaguered steelmaker Liberty Steel is looking to recapitalise or divest its main European rolling lines, the company said today.

The lines are Liege in Belgium, Dudelange in Luxembourg and Piombino in Italy, and have a capacity of over 2.5mn t, the company said. Liege and Dudelange galvanise hot-rolled coil (HRC) and produce tinplate and blackplate, Magona produces prepaint and hot-dipped galvanised (HDG) products.

"The primary objective is to review options for strategic partnerships through long-term HRC feedstock supply contracts, but will also consider and [sic] co-investment and divestment options," Liberty said.

Negotiations over at least one of the assets have been ongoing for a number of months, but have potentially stalled at the contract signing stage, sources suggested this week. The company refused to comment on "speculation".

As with Liberty's other EU and UK assets, the lines have not been producing anywhere near full capacity, if at all, for a number of years. They have not been supplied with feedstock from the company's own mills. Galati in Romania is operating, but nowhere near capacity, while Ostrava is rolling limited quantities of imported slab with the aid of third-party financing.

As far back as June 2021, Belgium's Walloon government discussed loaning Liberty Steel an undisclosed fee to continue operating Liege-Dudelange, subject to the organisation of a sales procedure being started. Walloon's investment firm Sogepa said the loan would be subject to "strict conditions", including the organisation of a sale, but the loan was not finalised in the end.

That same month, Liberty merged the downstream assets of Dudelange, Liege and Piombino into its Galati organisation. At the time the company said this would see Galati become the primary supplier of HRC to the rolling lines.

The difficult market environment in Europe is compounding the difficulties faced by Liberty. Last week it mothballed its merchant bar mill in Scunthorpe, UK, as first reported by Argus. In reality, the mill has not produced anything for years.

At Liberty's Speciality Steel business in south Yorkshire, UK, around 7,000t has been produced this year, out of nameplate capacity of 1.2mn t/yr.

By Colin Richardson