Liberty Steel will target the automotive and defense sectors

Via AGMetalminer.com

According to Liberty’s Steel’s parent company GFG Alliance, the Dunaújváros-based steel industry leader’s apartment maker plans to target the automotive and defense sectors. This change will take place with the commissioning of two electric arc furnaces, which will replace the two furnaces currently occupying the Hungarian site.

A company source told MetalMiner that Dunaújváros had past exposure to the automotive sector with its finished products, but mainly targeted the construction and infrastructure sectors. They also added that representatives of car manufacturers have already visited the factory.

GFG provides funding for new steelmaking initiatives

The comments follow GFG Alliance’s announcement on August 5 that Chinese group CISDI Engineering has received the equivalent of 1.3 billion euros ($1.43 billion) in preliminary support from compatriot Export and Credit Insurance Corporation (Sinosure) to finance the project. This support will enable CISDI to receive funding as well as export and install the new equipment at Liberty Dunaújváros.

“In principle, the agreement will facilitate additional support and guarantees to complete the capital structure behind this landmark investment,” GFG noted. They went on to say that upgrades to the existing hot rolling and galvanizing production lines and the establishment of new lines to meet defense and automotive applications are also part of the plans for Dunaújváros.

However, the MetalMiner source declined to say whether there had been discussions about financial aid for the project, either with the Hungarian government or the European Union. They added that there is also no time frame for building and commissioning the new hot end and refurbished rolling mills.

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

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Hungary’s steel industry seems to be becoming more auto-centric

In 2023, Hungary’s motor vehicle production totaled 507,225 units. According to information provided by macroeconomic data company CEIC, this reflected a 14% increase from 441,729 units in 2022. While the latest figure represents a 3.66% decline from the 2016 peak of 526,500 units, the data The CEIC showed it 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 have factories in Hungary. In fact, an April 9 report by news portal Hungary Today stated that starting in 2025, Mercedes-Benz aims to double its production capacity in Hungary once it completes construction of a new factory in Kecskemét, which is about 80 kilometers east of Dunaújváros by road. The report noted that the German multinational started operations in Kecskemét in 2012 and produced a total of 150,000 vehicles in 2022.

Big changes are coming to Dunaújváros

In September 2023, the Resource Planning and Policy Council for NATO, which Hungary joined in 1999, recommended a total military budget cap of €4.4 million ($4.8 billion) by 2030 – more than twice as much as €2.13 billion ($2.33 billion). recommended for 2024. The company said the planned 80 metric ton EAFs will reduce carbon emissions by 80%. The furnaces will use ferrous scrap and DRI to cast up to 3 million metric tons of crude steel per year for casting into high-quality slabs for further rolling, which is double Dunaújváros’ current capacity.

Dunaújváros is located approximately 85 kilometers south of the capital of Hungary, Budapest. The site has two blast furnaces that can produce about 1.4 million metric tons per year of pig iron, although they remain blown. Meanwhile, two 135-ton basic oxygen furnaces at the site can produce about 1.6 million metric tons of crude steel annually.

The inside source told MetalMiner that Dunaújváros’ rolling lines are still operating, but at very low levels. “We’re working campaign by campaign,” the source added. Dunaújváros’ range of rolled products includes hot and cold rolled coils and hot dip galvanized steel. The factory also produces castings, forgings, machining, gears, heat treatment, steel structures and welding to customer specifications.

Triumph over rivals in a €65 million Dunaferr deal

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

Ukraine’s Industrial Union of Donbass (ISD) originally purchased the plant in 2004. However, Russia’s VEB.RF, formerly known as Vnesheconombank, ended its financing in 2008 due to the global financial crisis.

By Christopher Rivituso via AGMetalminer.com

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