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[Ferro-Alloys.com]

Tata Steel will take some of its Port Talbot rolling mills off line for maintenance on December 3-22, partly in response to more difficult trading conditions in the UK, market participants and sources close to the company told Argus today.

"We will be carrying out planned maintenance in some of our mills during this period, although there will be no impact on customers," a company spokesperson said.

Conditions have deteriorated markedly in the UK market since the summer. At the zenith of the purchasing cycle in May and June, service centres bought more than necessary in response to poor delivery performance from local mills and exceptionally strong end-demand. Now that demand has dissipated substantially, partly driven by reduced automotive production, there is too much stock in the system. Some UK ports have been turning away vessels, with one carrying three times more inventory than it was at the beginning of the year. Some are block stowing coils, which combined with a shortage of lorries is making it hard to extract tonnes from quaysides, although some say this is beginning to ease.

An independent processing line has 40,000t of customer stock in house, up by around a quarter from its usual inventory, and is only accepting further deliveries with processing orders.

Market sources said Tata may be taking the outage to prevent prices from slipping, as the mill is now in talks for January contracts with its larger buyers. It is trying to maintain prices at around ￡900/t ddp West Midlands for S275 grade material, but buy- and sell-side sources expect deals will be finalised closer to ￡860-870/t ddp, with prices under pressure from cheaper European and international offers and lower sheet offers amid sluggish demand.

Argus' weekly UK hot-rolled coil assessment was unchanged at ￡840/t ddp West Midlands last week, in line with lower offers from some European and Russian producers.

Source: Argusmetal

• [Editor:kangmingfei]