Salzgitter, one of Germany’s prominent steelmakers, experienced a serious fire on February 28, 2025, at its hot-rolling mill located at Salzgitter Flachstahl in Lower Saxony. This facility plays a critical role in the production of flat steel products, including hot-rolled coil, cold-rolled coil, and hot-dip galvanized steel. According to a letter sent by the company to its customers, the fire has disrupted production at the hot-strip mill, and significant repairs are now required.
Cause of the Fire
The company has yet to disclose the exact cause of the fire, but it has led to considerable damage. As a result, the necessary emergency repairs have temporarily halted production at the hot-strip mill. Salzgitter, which operates a highly integrated steel mill, does not have any additional hot-strip mills to support production, so other downstream production lines reliant on hot-rolled steel will also be impacted. Consequently, production capacity for these processes will likely remain reduced until full repairs are completed.
Impact on Steel Production and Deliveries
Salzgitter Flachstahl is one of the largest steel production facilities in Germany, with a combined annual capacity of over 4 million metric tons of pig iron, produced through three blast furnaces. The facility produces 3.5 million metric tons of hot-rolled coil, 1.8 million metric tons of cold-rolled coil, and 1.4 million metric tons of coated flat steel annually. As a result of the fire and subsequent disruptions, Salzgitter’s supply of these products will likely be delayed, leading to potential shortages in the market.
Expected Supply Tightness and Price Increases
The fire and the ongoing repairs are expected to exacerbate supply constraints in the steel market, further tightening an already strained supply chain. Additionally, the ongoing review of steel safeguards and limited imports have already created a challenging environment for steel availability in Europe. These factors are expected to push domestic flat steel prices higher in Germany.
Market observers have already seen price movements in response to the supply disruptions.
Price Reactions in Downstream Products
Other downstream steel products, such as cold-rolled coil (and hot-dip galvanized (steel, have also shown price increases in light of the disruptions. Prices for CRC and HDG are hovering around €740-750 per metric ton delivered, with ex-works prices ranging from €730-740 per metric ton. Official offers for deliveries in mid-May/June have been reported at €750-760 per metric ton delivered, equating to €740-750 per metric ton ex-works.
KEY TAKEAWAYS:
• Incident at Salzgitter: A fire at Salzgitter Flachstahl's hot-rolling mill has disrupted production.
• Production Capacity Impact: Hot-rolled, cold-rolled, and hot-dip galvanized steel production is affected.
• Production Halt: Repairs are underway, but full production is expected to resume only after completion of repairs.
• Market Price Impact: Supply disruptions are likely to drive up steel prices in Germany, especially for flat steel products.
• Price Increases: Hot-rolled coil prices rose to €629.04 per metric ton, with further increases expected.
• Downstream Products: Cold-rolled coil and hot-dip galvanized steel prices have already increased in response to the supply disruption.
• Ongoing Uncertainty: The exact timeline for resumption of full operations remains unclear.
