Tighter supplies likely to push prices even higher after fire halts production at Belgian long steel mill – sources

Steel production at the Riva Group plant in Charleroi was suspended for three weeks on Monday, June 21 after a fire affected two major transformers leading to a power cut a the plant.

The Thy-Marcinelle steelworks produces about 850,000 tpy of wire rod, rebar in coils and welded mesh.

Sources said the three-week suspension was likely to make tight market conditions even tighter because supplies of wire rod and rebar in coils in the European Union were already constrained.

“Depending on how long [the plant is] out of production it could create big issues in the local Belgian, German, Dutch and northern France markets,” one source said.

“[The fire at the plant will] definitely aggravate supply issues and [lead to] further price rises,” a second source said.

Long steel prices in the EU have surged to 13-year highs in recent months, aided by the supply-demand imbalance caused by the opening up of Europe’s major economies after the Covid-19 lockdowns.

In May, Fastmarkets’ price assessment for steel wire rod (mesh-quality), domestic, delivered Northern Europe, averaged €760 ($905) per tonne , compared with €455 per tonne in May 2020, which was its highest level since August 2008. And the uptrend continued into June, with latest Fastmarkets latest assessment on June 16 rising to €860-900 per tonne.

Riva Group was not available for a comment at the time of publication.