Steelmaker HBIS Serbia is idling blast furnace number one at its Smederevo plant because of weak demand.

The company is currently preparing to idle the furnace as it adjusts to the market environment, and will restart it when conditions allow.

The Smederevo plant can produce around 2.2mn t/yr of crude steel via its two furnaces but will be reducing this to a little over 1mn t/yr, according to market sources. Blast furnace one has a capacity of around 900,000 t/yr.

HBIS is the first producer apart from ArcelorMittal to openly idle a furnace - most mills appear to have been waiting for others to lead before following suit. ArcelorMittal has idled a unit at Dunkirk, and has put staff on to short-time work at Bremen, although no units have been idled.

Alongside weak demand, rising gas costs are also impacting producers. One smaller Visegrad mill has idled all of its rolling lines because of lacklustre buying and high conversion costs, and is just casting slab that it is offering into the merchant market. Another Visegrad producer is also selling more merchant slab. TTF natural gas prices are approaching €180/MWh, up from €81.5/MWh on 13 June.

German producer Thyssenkrupp is also taking down a hot-dip galvanising line for maintenance, according to sources, although this could not be confirmed by the company.

Tata Steel Ijmuiden has been stocking more slab ahead of its blast furnace outage next year, rather than sell coil at lower prices.

Argus' daily benchmark northwest EU hot-rolled coil index was €810.75/t on Thursday, down from a peak of €1,411.75/t on 24 March. The daily Italian HRC index has declined from €1,349.75/t to €747.75/t over the same period.

By Colin Richardson