Israel’s Hod Metal cuts production due to lack of scrap

Thursday, 24 September 2009 16:35:18 (GMT+3)   |  
       

SteelOrbis has learned that Israel's leading producer and processor of reinforcing steel and steel wire products Hod Metal Products and Manufacturing Co. Ltd., also known as Hod-Assaf Industries Ltd. (Hod Metal), has cut its rebar production due to the lack of scrap in the local Israeli market. Production has been cut at the company's rolling mill located in the south of Israel, SteelOrbis understands.

The Israeli producer's production cut is a consequence of the high price levels of scrap that the local market in Israel cannot afford, as a result of which the scrap is sold to Turkey instead.

Commenting on the company's current output cut, Hod Metal managing director Andre Shlomo Vaida told SteelOrbis, "The problem is always the margin between scrap and rebar/wire rod. Currently, scrap prices, relatively to the rebar prices in the local Israeli market, do not provide a sufficient margin which will enable a profitable operation of the steel producing sector of the company."

According to Mr. Vaida, very poor quality and very contaminated scrap is collected in Israeli, but it still receives a higher than appropriate price from the Turkish competitors of Israeli producers.

Mr. Vaida stated, "Hod Metal will return to production upon the availability of scrap, estimating that it would happen within two to three weeks."

Hod Metal's managing director went on to add, "The commodity rebar stock of Hod Metal for fellow processors is at a higher level than usual, just like the stock levels of the downstream processing mills of Hod Metal. Therefore, Hod Metal will protect all its customers from the lack of scrap supply in the Israeli local market."

"Hod Metals is not planning to close any of its facilities since the company has enough scrap, which is practically the sole raw material of the company," Mr. Vaida concluded.

Hod Metal has two main divisions: the steel production division includes the scrap processing unit, melt shop and rolling mill, and the downstream division which includes the rebar processing unit, mesh production, ferrous and non-ferrous wire production. Apart from non-ferrous and drawing quality wire, Hod Metal produces all raw materials in-house.

Hod Metal has three rebar processing factories in Israel: the Akko Steel Complex in the north, at Neve Neeman Industrial Zone, Hod Hasharon in the center and at Qiryat Gat Industrial Zone in the south. The factory locations allow an efficient and quick response to all the company's client construction sites all over Israel.


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