By Zandi Shabalala, Michael Hogan and Mai Nguyen
HAMBURG – German lead producer Berzelius Stolberg has declared force majeure on metal shipments from its Stolberg smelter in western Germany after floods hit production last week, the company said on Wednesday.
Force majeure is a contractual clause invoked when factors outside a company’s control render it unable to meet its commitments to customers.
The smelter supplies European battery producers with lead and has a capacity of about 155,000 tonnes, according to its website. Force majeure was declared on contracts last week, a source with direct knowledge of the matter said.
At least 170 people died and thousands went missing in last week’s flooding in Germany’s worst natural disaster in more than half a century. A huge clean-up operation is under way after drier weather this week.
“Our Stolberg facility is closed due to the circumstances that have affected large parts of western Germany,” said an email to Reuters from parent firm Berzelius Metall, which itself is part of the Ecobat group.
“In parallel we are also beginning the technical assessment that will help define when reopening may be possible,” it said. “We anticipate this may take at least several weeks.”
Clean-up and recovery activities at the plant and surrounding site have begun and the company is working closely with numerous local and inter-regional partners who have offered support, Berzelius Metall added.
Aurubis, Europe’s largest copper producer, said on Friday that floods had stopped production at its nearby Stolberg copper products plant.
The 12-million tonne global lead market is relatively tight outside of top consumer China due to higher demand from Europe and the United States.
“There is no immediate impact on the market but we need to see how long this outage lasts,” CRU Group analyst Neil Hawkes said of the Stolberg plant.
But benchmark lead prices on the London Metal Exchange, near three-year high, could spike in anticipation of potential shortages, Hawkes added.