Steelmaker Voestalpine orders higher, no restart of idled blast furnace yet: CEO

London — Austria-based steelmaker Voestalpine will restart the idled blast furnace at its Linz mill once its steel production reaches 80% of capacity, up from 75% now, but it is not possible to estimate when this will be achieved, CEO Herbert Eibensteiner told S&P Global Platts August 5.

For the time being the main mill at Linz was able to meet demand using the other two blast furnaces on the site. The idled blast furnace cuts pig iron capacity by 20%. The site has a pig-iron capacity of 5 million mt a year and produces hot- and cold-rolled coils as well as electrogalvanized, hot-dip galvanized and organic-coated steel strip.

"We are optimistic, based on bookings in June...but it is not possible to tell when we can restart the blast furnace. We can cover the needs for now and will decide in the next few weeks on the blast furnace," Eibensteiner said.

During the press call on the company's results in its fiscal first quarter (April–June) Eibensteiner said Voestalpine was also relining a blast furnace at Donawitz, which was scheduled to finish in October. The company would decide a month beforehand whether "full operation" would be possible.

Around 14,300 employees were still furloughed globally at the group, but the estimate was that, with demand picking up, more would return to work.

Demand from customer groups such as aerospace and oil and gas was still lagging, making it particularly difficult for the seamless pipe division. The automotive industry -- to which Voestalpine is heavily exposed -- had picked up, but the standstill in the sector during the lockdowns across Europe and North America had a severe impact on the reporting period.

"April was the most difficult month, but we've seen step-by-step recovery although it varies from division to division," Eibensteiner said, adding that some customers had idled operations over the summer.

Voestalpine was now focusing on maintaining cash flow and cost management, restructuring where needed.

Due to steel production cutbacks in Europe and North America, orders from the direct reduction plant at Corpus Christi in the US had fallen, which was partially offset by new customers in the Far East.

Revenue of the steel division was down 29.4% year on year in Q1 to Eur834.9 million ($989.3 million), attributable to lower deliveries, while the Voestalpine group overall reported revenue of Eur2.4 billion in Q1, down 28.1%.

Voestalpine said the outlook remains difficult to predict, expecting an EBIDTA of Eur600 million-Eur1 billion for the whole fiscal year.