ArcelorMittal Italia negotiations resume amid Taranto demand crisis

Negotiations are resuming between the Italian government and ArcelorMittal Italia on the future of former steelmaker Ilva, generating further speculation. The parties are now meeting again to discuss the future industrial plan and the government’s possible participation, sources close to the matter tell Kallanish.

According to local paper Milano Finanza the government may be willing to become a stakeholder by as much as 40-45%. This however remains unsubstantiated by the parties involved. As the negotiations resume and the current crisis is damaging the Italian steel sector, ArcelorMittal’s position is rumoured to remain set on substantial job cuts. This is said to involve half the workforce of Taranto and would reduce production levels to 6 million tonnes/year, Kallanish hears.

ArcelorMittal’s main Taranto site is slowly resuming output as Italy came out of lockdown on 4 May (see Kallanish 6 May). The Italian market however has not returned to normal pre-lockdown levels of activity. Demand for flat products is fluctuating at low levels for Taranto, says a union source. Buyers are not purchasing from mills and coil prices are falling significantly, particularly for larger volumes.

Market activity for producers in 2020, already suffering following the slowdown in end-user buying in 2019, is forecast to be slow with profits shrinking, the source adds. Trade unions asked the Italian government last week for an urgent meeting following the announcement some equipment will not be restarted momentarily due to the current crisis. Some orders are also being delayed which is causing issues with the stocking of material. The union source also says that the company is temporarily laying off 1000 workers due to the Covid-19 economic crisis.

ArcelorMittal declined to comment on the matter when approached by Kallanish.