Liberty Steel has been asking for payment upfront for flat steel products to secure cash flow, but buyers have been reluctant to take the risk of making such deals on concerns about the steelmaker's financial situation, sources told Fastmarkets on Thursday March 25.
In addition, several sources said that the producer has been asking for early payment for material already rolled for customers that agreed deals earlier.
"Raw material suppliers ask Liberty Steel to pay upfront, so it needs to get cash to pay for scrap and other raw materials," an Italian source said.
Earlier this month, raw materials suppliers to Liberty sites in the UK and Europe were said to be demanding cash-in-advance from the company after
news emerged about an investigation into Greensill Bank.
On March 3, German financial watchdog Bundesanstalt f? 1/4 r Finanzdienstleistungsaufsicht (BaFin) imposed a moratorium on Greensill Bank, which is the key funding facility for GFG Alliance, parent company of Liberty Steel. On March 8, Greensill Capital, the bank's own parent company, filed for insolvency.
This situation has been contributing to...