Liberty Steel scaling back operations in UK

An electric arc furnace (EAF) mill in the United Kingdom operated by Liberty Steel has reportedly idled its melt shop and has had difficulty procuring scrap, according to a March 10 news article.

An online article from S&P Global indicates the “cash squeeze” being experienced by Liberty’s parent company, the U.K.-based GFG Alliance, may have led to the mill’s inability to secure scrap. GFG Alliance had reportedly relied on London-based Greensill Capital for operating funds. That firm filed for bankruptcy administration on March 8.

The EAF mill in Rotherham, England, had once produced specialty steel for the aerospace market, but more recently was producing rebar because of declining demand in the aerospace industry.

According to S&P, which has seen a GFG statement issued late in the U.K. work day on March 10, the company indicated “some U.K. businesses will be operating intermittently.”

Sources contacted by S&P indicated the mill had stopped producing rebar on March 8, in large part because it had “failed to buy any ferrous scrap” from traders and processors who were unable to buy “suitable” credit insurance on materials shipped to the Liberty mill.

In an e-mail from a GFG spokesperson sent to S&P, the metals producer seemed to imply it was a localized problem, with the spokesperson writing in part, “We can confirm there has been no significant impact on our supply chain across continental Europe.”

The BBC has reported that GFG Chair Sanjeev Gupta, in a meeting with British trade union officials on March 10, stated, “We have adequate funding for our current needs while we bridge the gap to refinancing the business.”

However, in the same meeting, Gupta also reportedly added, “There are some exceptions, and I’m sorry to say that includes some of our U.K. steel businesses.”