Liberty Steel to focus on automotive and defense sectors

Through AGMetalminer.com

According to Liberty’s Steel parent company GFG Alliance, the steel industry leader, a flat sheet producer in Dunaújváros, plans to focus on the automotive and defense sectors. The change will come after the launch of two electric arc furnaces, which will replace two blast furnaces currently located at the Hungarian site.

A source at the company told MetalMiner that Dunaújváros had some contacts with the automotive sector in the past through its finished products, but its main focus was on the construction and infrastructure sectors. They added that representatives of car manufacturers have already visited the plant.

GFG secures financing for new steelmaking initiatives

The comments follow GFG Alliance’s Aug. 5 announcement that Chinese group CISDI Engineering has received the equivalent of €1.3 billion ($1.43 billion) in initial support from its parent company, Export and Credit Insurance Corporation (Sinosure), to finance the project. This support will allow CISDI to receive financing, as well as export and install new equipment at Liberty Dunaújváros.

“The agreement, in principle, will facilitate further grant support and guarantees to finalize the capital structure behind this groundbreaking investment,” GFG noted. They went on to say that the modernization of existing hot-rolling and galvanizing production lines and the creation of new lines for defense and automotive applications are also part of Dunaújváros’ plans.

However, MetalMiner’s source declined to say whether there were any talks about financial assistance for the project with the Hungarian government or the European Union. It added that there is also no timetable for the construction and launch of the new hot end and modernized rolling mills.

Liberty originally announced an agreement with CISDI to conduct a feasibility study on the furnaces in mid-May.

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Hungarian steel industry wants to become more car-oriented

In 2023, motor vehicle production in Hungary totaled 507,225 units. According to macroeconomic data firm CEIC, this represents a 14% increase from 441,729 units in 2022. While the latest figures indicate a 3.66% decline from the 2016 peak of 526,500 units, CEIC data showed this was more than 6.35 times higher than the record low of 79,792 units reported in 1997.

In addition to local manufacturers such as RÁBA Automotive Group, global brands Audi, Suzuki and Mercedes-Benz all have manufacturing facilities in Hungary. In fact, an April 9 report published by news portal Hungary Today stated that starting in 2025, Mercedes-Benz aims to double its Hungarian production capacity after the completion of a new plant in Kecskemét, which lies about 80 kilometers (50 miles) east of Dunaújváros by land. The report noted that the German multinational originally started operations in Kecskemét in 2012 and will produce a total of 150,000 vehicles in 2022.

Big changes are coming to Dunaújváros

In September 2023, NATO’s Resources Policy and Planning Board, which Hungary joined in 1999, recommended an overall military budget ceiling of 4.4 million euros ($4.8 billion) by 2030 — more than twice the 2.13 billion euros ($2.33 billion) recommended for 2024. The company said the planned 80-ton EAF arc furnaces would cut carbon dioxide emissions by 80%. The furnaces would use ferrous scrap and DRI to pour up to 3 million tons of crude steel per year to cast high-quality slabs for further rolling, twice Dunaújváros’ current capacity.

Dunaújváros is located about 85 kilometers south of the Hungarian capital, Budapest. The site is home to two blast furnaces that can produce about 1.4 million tons of pig iron per year, although they remain blown down. Meanwhile, the site’s two 135-ton oxygen furnaces can produce about 1.6 million tons of crude steel per year.

An internal source told MetalMiner that the Dunaújváros rolling lines are still operating, but at a very low level. “We are working on a campaign-by-campaign basis,” the source added. Dunaújváros’s rolling product range includes hot and cold rolled coils and hot-dip galvanized steel. The plant also produces castings, forgings, machining, gears, heat treatments, steel structures and welds according to customer specifications.

Triumphs over rivals in €65m Dunaferr deal

Liberty completed its acquisition of the Hungarian steelmaker, then called Dunaferr, in October 2023. Liberty, a London-based company, offered 65 million euros ($70.5 million) for the plant, beating out several competitors including Ukrainian group Metinvest, India’s Vulcan Steel, Swiss firm Trasteel Trading and local company Trinec Property.

The Ukrainian Industrial Union of Donbas (ISD) originally acquired the plant in 2004. However, Russia’s VEB.RF, formerly known as Vneshekonombank, ended its financing of the plant in 2008 due to the global financial crisis.

By Christopher Rivituso via AGMetalminer.com

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