German steel production up 6% on year in January as mills ramp up

German crude steel production increased to 3.3 million mt in January, but although production figures are back to 2019 levels, the output would still be on a "relatively low level", the steel federation said.

However, demand comeback since summer last year has resulted in widespread ramp up by mills with production increasing on year-on-year level since August.

Crude steel production via the blast furnace route increased 7.1% on the year to 2.35 million mt in January, while output via electric arc furnace rose 3.3% to 956,000 mt.

Pig iron production saw an increase of 7.9% year on year to 2.2 million mt. Hot-rolled steel production saw a 10% increase to 3 million mt.

The German steel market is currently suffering from material shortage with more volumes from further increases in capacity utilization expected by late Q2.

Steel prices have seen sharp rises since Q3 2020 but plateaued on a 13-year high during the Lunar New Year period at Eur730/mt EXW Ruhr for hot-rolled coil, according to the daily Platts HRC assessment for Northern Europe on Feb. 18.

According to the monthly Platts German steel sentiment survey for February, market participants expect a slight increase in production in the short term, but sources said any additional output will be used to decrease the current order backlog at mills as lead times continue to be unusually long from Western European mills, stretching into early summer.

Mills have been further hampered in deliveries in February by the cold snap with Salzgitter declaring force majeure Feb. 10 and Thyssenkrupp confirming increasing delays in shipments.