Metinvest, Danieli complete €3bn flats mill JV closing
Metinvest and Danieli have completed the closing of Metinvest Adria, their long-awaited joint venture that will oversee their new €3 billion ($3.5bn) low-carbon flat steel mill in Piombino, Tuscany. The deal was completed earlier this month after all conditions in the shareholders’ agreement, including regulatory approvals, were met.
The new plant that will be built with technology supplied by Danieli. It will have a production capacity of 2.7 million tonnes/year of hot-rolled steel with significantly reduced CO2 emissions. The project will relaunch the Piombino industrial site that has been idle for over a decade, generating around 1,100 jobs with strong backing from Italian national and local authorities, the two firms say in a note obtained by Kallanish.
Metinvest will hold a 75% equity stake in the venture, while Danieli retains 25%. The project will be financed through a combination of shareholder equity, external debt, and state support. The equity contribution will be split 75/25, with Metinvest holding 75% and Danieli 25%. Governance will be handled by an eight-member board, split equally between Metinvest and Danieli, along with a supervisory board.
“The completion of the transaction marks an important milestone in the strategic partnership between Metinvest and the Danieli Group, aimed at developing a state-of-the-art plant for steel production and flat product rolling in Italy,” the note states.
Earlier this month, Metinvest Adria officially signed the programme agreement with both central and local authorities, marking a major milestone in the development of the new plant.
The programme agreement was signed with the Ministry of Enterprises and Made in Italy (MIMIT), the Ministry of Infrastructure and Transport (MIT), the Ministry of the Environment and Energy Security (MASE), the Ministry of Labour, the Tuscany Region, the City of Piombino, and other local authorities. Additionally, Metinvest Adria has signed a separate development agreement with MIMIT.
Both agreements are critical steps in securing the necessary public and private financial commitments to develop the steel production hub in Piombino. In parallel, an insurance coverage guarantee agreement has been finalised with Italian state entity SACE, further strengthening the project’s financial framework. This follows the recent signing of an agreement between Metinvest Adria and trade unions, paving the way for worker involvement and local stakeholder alignment (see Kallanish passim).
Natalia Capra France
Non-prime coil could gain favour among European buyers
European coil buyers may be inclined to increasingly purchase non-prime material, as a consequence of the continued lull in demand, but also as part of a long-term development.
“I see more people asking for non-prime material” amid the prevailing caution not to overspend on volumes that might further lose value, a Benelux trader tells Kallanish. “This, of course, is only for applications where it is possible to use non-prime,” he adds.
Steel service centres (SSC) prefer to stick to prime material for their processing, but have not excluded the possibility of sourcing non-prime, secondary material. A German SSC manager notes: “It depends on the purpose. If the part is not visible on the outside, many are okay with 2A [a German secondary-quality steel grading],” he says. However, 1A remains the firm’s mainstay and customers would not typically substitute one for the other, he adds.
Sometimes, mills downgrade prime material to 2A, to have a reason to sell it at a lower price without losing face. There has long been a system for doing this, one observer says. For cold rolled coil, the German classification range goes from the customary DC-01 grade up to DC-05, which would fetch some €40/tonne ($47) more.
“[The major mill’s] products are normally DC-03,” he explains. “From them, buyers normally order DC-01, as they know they will receive DC-03, because for the mill it does not pay to adjust production too often. And then the buyers from their customers can still certify it as DC-03, and charge a correspondingly higher price.”
This can also work to the disadvantage of buyers from mills. The trader tells the case of one buyer who did not ask for certificates and bought for years from a big mill group, which was very happy as it could use non-prime and sell it at prime prices. A new manager at the buyer company then questioned the purchases and started buying from the trader rather than the mill.
Regarding current market prices, players see little change from the €570-580/tonne ex-works ($671-682) range that has prevailed for hot rolled coil for several weeks. Cold rolled coil will cost the customary premium of €80/t.
Christian Koehl Germany