Federacciai confirms mildly positive outlook for Italian steel

Alessandro Banzato, head of Italian steelmakers association Federacciai, has confirmed a mildly positive outlook for the Italian steel sector, after the strong declines registered during March and April.

During a press conference in Milan attended by Kallanish, the executive forecasted that 2020 steel production should fall by -17% on-year. This drop is considered positive, given that output in March and April each dropped -40% y-o-y. “The market is clearly improving and we remain mildly positive also for the first months of 2021,” Banzato said.

Looking at the situation in more detail, Banzato underlined the better performance of long products, whose output dropped -16.2% in January-August. This contrasts with the persistent difficulties faced by flat products, mainly due to the steep output reduction at ArcelorMittal Italia’s mill in Taranto. Their output fell -20.8% y-o-y in January-August.

Some uncertainties continue in the Italian market due to the ongoing negotiations between ArcelorMittal and Italian authorities over the future of the former Ilva. A new agreement is expected to be reached by the end of November, but Banzato underlined once again the fact that Italian manufacturing industries need a large steel complex like Ilva as a supplier. The Taranto plant significantly reduced its output during the last year, raising concerns among many market observers.

“If needed [in case of an exit by ArcelorMittal], I would of course welcome the intervention of the government to take over control of the company for a limited period of time, to prepare for a new future,” Banzato noted. “At the moment, nevertheless, negotiations between ArcelorMittal and Italian authorities are ongoing and we can only wait and see what the decisions will be.”