European steelmaker, Voestalpine has announced a one-time write-off of its direct-reduction plant in Texas due to the high raw material costs associated with producing sponge iron at the plant. However, the inventory volumes of the plant were not disclosed.
The company said in a statement that the high iron ore costs and the tight availability of scrap, both raw materials used to make hot-briquetted iron, were impacting prices and making operations at the plant unsustainable.
The firm has also announced a small scale write-off of inventory at its Austrian plant, Voestalpine Tubulars, that produces seamless tubes and exports to the US. The plant is particularly affected by the tariffs imposed by the US under Section 232 on European steel and aluminium products and expects another write-off in addition to this.
That being said, Voestalpine expects an EBITDA between €800mn and €1bn for FY2021, assuming that operations are not hindered by COVID-19 shutdowns anymore in 2020. Previously, in June, the firm forecasted an EBITDA ranging from €600mn and €1bn.