Liberty Steel recently won a bid to take over Hungary’s Dunaferr. According to Hungary’s Ministry of Economic Development, a local court put the integrated flats producer into liquidation in late 2022. Liberty will pay €55 million ($61 million) for the Dunaferr plant, beating out India’s Vulcan Steel, Ukrainian group Metinvest, Swiss-based Trasteel Trading, and local company Trinec Property.
In its July 11th statement, the Ministry stated that Liberty originally submitted its bid on July 7. However, the organization also noted that the “hard work is just beginning. The government is committed to an outstanding green transition for the future of the steel industry.” They also went on to add “The operation of the factory is in need of reorganization. Significant improvements are necessary for the production of higher value-added products, the modern, 21st-century technological change, and the production of green steel.”
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Liberty Steel Inherits Significant Steel-Making Capacity
A Budapest municipal court put Dunaferr into liquidation in December 2022. At the time, reports indicated that the steelmaker’s debts exceeded Ft 500 billion ($1.48 billion). The Hungarian government also asked Liberty to supply volumes of coal to Dunaferr in order to keep the coking ovens in operation. Reports noted that the plant also restarted blast furnace No. 2 in February, followed by the cold and hot rolling mills.
Dunaferr has two blast furnaces, which can produce about 1.2 million metric tons per year of pig iron. It also has two 135-ton basic oxygen furnaces to convert that iron into about 1.6 million tons of crude steel. In addition, the site has a twin-stand vertical caster capable of producing 1.7 million metric tons of slab in 230mm gauge and in 860-1550mm widths. Meanwhile, Dunaferr’s hot rolling mill can produce hot rolled coil with a maximum width of 1,540mm and in 1.2-18mm gauges.
Further downstream, Dunaferr can produce cold rolled coil in 0.4-2.5mm gauge and a 550-1,540mm width. Information on the company’s website also noted that the site has a hot-dipped galvanizing line.
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Some Analysts Question Liberty’s Overall Stability
One source expressed reservations about Liberty’s acquisition considering the company’s current situation and history. Indeed, Liberty currently faces a number of lawsuits in connection with debts related to financier Greensill’s 2021 collapse. That incident also prompted Liberty to seek a buyer for Belgian flats producers Hayange and Ascoval in 2021.
The source also noted that Dunaferr has suffered from a lack of investment in all areas since 2008. Russia’s VEB.RF, previously known as Vnesheconombank, ended its funding to the previous owner. Industrial Union of Donbass was forced to end their ownership as a result of the financial crisis. The source added that Liberty does not own captive resources, which could complicate the acquisition of needed feedstock for Dunaferr’s hot end.
Liberty Steel has an estimated global crude steel capacity of about 15 million metric tons per year based on information from its website. Other assets of the group include an integrated longs and flats producer at Ostrava, in the Czech Republic, and a Romanian integrated flats producer at Galati. The group also has a flats roller in Skopje, North Macedonia, and a plate producer Czestochowa, Poland.
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