Acerinox, the leading stainless steel producer in Spain, has announced plans to halt production at its Los Barrios smelter starting October 12, 2024. This decision comes in response to decreased demand for stainless steel and a loss of key clients, according to reports from Spanish media. The Los Barrios facility has a significant production capacity of 1 million metric tons per year, making this halt a noteworthy development in the industry.
The halt in production will primarily affect the plant’s hot-rolling mill, while the cold-rolling mill may cease operations shortly afterward. This temporary lay-off, referred to as ERTE, Expediente de Regulación Temporal de Empleo, in Spain, was agreed upon by both management and labor unions, following a new deal established in July that extends until 2027. The agreement reflects a collaborative approach between the company and its employees amid challenging market conditions.
In a report published by Diario de Cádiz, the company communicated to workers that the decision to halt production was a direct result of the current market situation, specifically the reduction in demand for stainless steel products. The company has faced difficulties recently, which culminated in a significant 17% decline in worldwide crude steel production during the second quarter of 2024, totaling 405,000 metric tons. Such a drop highlights the ongoing struggles within the steel industry, exacerbated by economic factors and shifts in consumer demand.
Acerinox operates several facilities beyond Spain, including plants in the United States and South Africa, as well as high-performance alloy production in Germany. These locations contribute to a combined melting shop capacity of 3.5 million metric tons annually. Despite its global reach, the company has also made the decision to halt production at its Malaysian subsidiary, Bahru Stainless, earlier in May due to similar market pressures.
The recent industrial action at the Los Barrios plant, which led to a complete production stoppage for approximately four months earlier this year, has intensified the scrutiny on Acerinox’s operational strategies. The company's willingness to negotiate temporary layoffs indicates a strategic pivot to mitigate further losses while aiming to stabilize its operations in an unpredictable market.
