Flat steel producer Acciaierie d’Italia to boost production in 2023, 2024

Italian integrated flat steel producer Acciaierie d’Italia (ADI) has confirmed its plans to boost crude steel production to 4 million mt in 2023 and to 5 million mt in 2024, the company told S&P Global Commodity Insights Feb. 1.

This is up from production of below 3 million mt in 2022, according to market participants’ estimates.

Previously market sources said the company was producing 10,000 mt/day of pig iron from the two blast furnaces.

The steelmaker also confirmed its intention to restart Blast Furnace 2 this year and to start the relining of Blast Furnace 5 in the second half of 2023.

The move follows the Ministry of Finance’s move to give a government grant of Eur680 million ($742 million) to the company, which the latter has said would be used to invest in the plant and support production capacity.

The BF5 relining is scheduled to start in the second half of 2023, while the construction of an electric arc furnace is also expected to start in H2.

“Over the years we have always maintained that without the refurbishment of the BF5 and the verticalization of the downstream systems there will be no future for the plant,” the Italian Union of Metalworkers said.

Currently ADI operates BF1 and BF4. The steelmaker idled production at BF2 in July last year in response to low demand, declining steel prices and high production costs, while 3.5 million mt/year capacity BF5 has been idled since 2015.

“We welcome the news and the willingness to revamp Furnace 5, which will be a priority for achieving the production objectives to make the site strategic at national and international level,” another industry union UGL said. “The company has also expressed its intention to operate with three kilns in the second half of 2023, arguing that if there are funds for the procurement of raw materials, it does not preclude a higher production than that declared…i.e. 4 million mt.”

However, the outlook of some market participants on the news regarding the production rise at ADI was more mixed. “We have seen a lot of plans related to restarting furnaces at Acciaierie d’Italia in the past, and they rarely materialized,” an Italian trader said.

Recently, several European steelmakers — SSAB in Finland, ArcelorMittal in Italy and US Steel Kosice in Slovakia — have resumed operations at blast furnaces idled in 2022. The return of these capacities in the market have made buyers concerned that the increased availability might put an end to the upward price trend in the EU coil market. Full order books for mills have been one of the main drivers behind flat steel price recovery, with European steelmakers selling out of rolling coil in the first quarter.

Platts, part of S&P Global Commodity Insights, assessed domestic hot-rolled coil prices in Southern Europe at Eur745/mt ex-works Italy on Jan. 31, up by Eur10/mt week on week and Eur65/mt on the month.

— Maria Tanatar