Buyers of hot rolled coil are fearing a tightening in supply as Acciaierie d’Italia (ADI) moves to a full shutdown after the recent Italian Supreme Court ruling, Kallanish notes.
Last week Italy’s Supreme Court rejected the appeals by ADI’s commissioners against the suspension of production at the hot end of the Taranto steelworks, citing “serious and significant” health dangers.
The ruling obtained by Kallanish confirms a previous ruling issued by the Milan Court of Appeal in July.
ADI’s coil buyers are contracting the company to re-roll their slabs and this is working relatively smoothly, one buyer says. However, delivery delays, which coil buyers have long experienced with Taranto, are expected to continue as ADI cuts its workforce following last week’s supreme court ruling. Some senior managers have reportedly lost their jobs.
Sources close to the company doubt that the letter of interest submitted by a group of Italian steelmakers will turn into a binding bid for Taranto and the northern Italian plants. “It is formed by too many people, and long steelmakers who will never come up with a coherent plan converging the interest of all the parties involved,” a source comments.
The government is reportedly considering a minority stake in any new company that will oversee Taranto and remains in talks with Jindal over a new binding offer. None of the sources close to the case believe a solution for Taranto and its 10,000 workers is in sight.
ADI’s shutdown is a heavy blow for re-rollers and service centres, another large coil buyer says. CBAM and the new quota system are sharply reducing import opportunities, leaving buyers more dependent on European producers.
One large European coil maker “is very arrogant when it comes to supply and all EU producers are extremely rigid about increasing their prices,” the buyer says. Large companies are still sourcing material from imports, but smaller buyers expect supply to be tight in 2027.
The Supreme Court heard the case on 20 October and reserved judgement before rejecting the appeal by ADI. Blast furnace No. 2, the only one still running at Taranto, stopped producing pig iron in early October after ADI ran out of raw materials. An earlier ruling had authorised the commissioners to keep the hot-end plants warm until the supreme court ruling.
ADI’s special commissioners have asked the government to increase temporary layoffs to 8,622 workers from 4,450, almost the company’s entire workforce, until February. ADI employs around 10,000 people directly.
