Arvedi Acciai Speciali Terni (AAST) has decided to temporarily halt one of the two electric arc furnaces (EAFs) at the Terni site for a week, according to a company representative.
Italy has been grappling with soaring energy costs since August, which has led to the current stoppage. The company has scheduled a temporary shutdown of an EAF for approximately one week, starting at the end of September.
It states in a note obtained by Kallanish that the high cost of electricity in Italy, which is three times higher than in other European countries where AAST’s competitors are located, is negatively affecting the relaunch of the Umbrian plant.
This is causing frustration as it hampers the progress made in efficiency improvements and undermines the benefits of the significant investments already made.
In an effort to offset the rising energy prices, the company implemented various cost control measures, including the purchase of more affordable Asian slabs. Nevertheless, the competitiveness gap persists not only in comparison to Asian producers, but also to other European steel producers who enjoy considerably lower energy costs.
From 1 January to 31 July, the Terni plant had an average payment of €97 per megawatt-hours ($107). In comparison, stainless steel producers in France paid €21/MWh, Germany paid €32/MWh, Finland paid €35/MWh, and Spain paid €62/MWh.
“This results in a significant distortion of competition, leading to severe consequences for the majority of Italian producers of stainless steel,” AAST warns.
The company is advocating for the matter to be discussed at national and European levels, with the backing of Umbria Region, in order to secure a reasonable energy cost. AAST previously generated electricity on-site until the government seized control of the power plant and shut it down.
The steelmaker is requesting permission from authorities to resume on-site electricity production by restoring the original conditions of self-production through the existing direct connection to the ENEL plant in Galleto. This would ensure a reliable and cost-effective supply of electricity that is comparable to similar supply in European countries (see Kallanish 9 September).
Natalia Capra France
