Belgian steelmaker NLMK La Louviere declares force majeure after fire

Belgian major flat steel products producer NLMK La Louviere, with around 1.7 million mt/year of hot rolling capacity, has declared force majeure on contracts following a fire, the company said July 21.

"We have declared force majeure," a company spokeswoman said in an emailed statement. "We have been ramping up production after the significant investment on the hot strip mill. We have been operating well when the fire incident happened. Luckily, we have sustained no injuries and the new equipment have not been affected by the fire. We expect to be back in operation after one week of repairs."

A mill source estimated that the mill might lose 50,000 mt of product, adding it was fortunate that the incident occurred as the market is entering a quieter period.

According to the source, the mill was not working at full capacity before the accident as after the investment period it had taken time to start up the blast furnace.

The situation is "a bit of a setback -- the mill will be out for a week so that is now the first view," the source said.

A fire occurred near the quarto equipment and the hot strip mill was stopped on July 17, the spokeswoman said. The works were not impacted by flooding in Belgium, she added.

NLMK La Louviere produces hot- and cold-rolled coils for the automotive, construction, and engineering industries. It is a subsidiary of NLMK Group, Russia's largest steelmaker, which supplies it with semi-finished steel products for reheating and processing.

NLMK La Louviere in recent months completed a Eur150 million ($177 million) upgrade to its hot rolling mill with a view to producing thinner and higher strength coils. The upgrade will enable the mill to increase its annual output to 2.2 million mt by 2022, up from 1.7 million mt/year previously.

Apart from the HRC mill, NLMK La Louviere is equipped with a 1.5 million mt/year HRC pickling line and a 0.6 million mt/year cold-rolling mill.

NLMK La Louviere is part of NBH, which NLMK jointly owns with Belgian investment fund SOGEPA.

Apart from La Louviere and Strasbourg, NBH comprises strip mill NLMK Strasbourg in France, two plate mills -- NLMK Clabecq in Belgium and NLMK Verona in Italy, and the NLMK Manage Steel Center in Belgium.

Market tightness

HRC prices in Europe recently hit record highs on high demand amid a recovery from COVID-19-related shutdowns, while supplies remained tight.

S&P Global Platts assessed Northwest European hot-rolled coil stable July 20 at Eur1,170/mt ($1376.50/mt) ex-works Ruhr.

Little spot market availability was heard for the rest of the year from Northwest European mills with an Italian mill heard to offer November production.