ArcelorMittal expects global steel consumption to drop -7% as a result of the Covid-19 pandemic, with particularly southern European consumption impacted for longer than expected. So say sources who have read the new industrial plan for the former Italian steelmaker Ilva, now ArcelorMittal Italia. By contrast, steel demand fell -8% after the 2008/09 financial crisis.
The new industrial plan for 2020-2025 has been reviewed and adapted to the current crisis from the previous plan submitted in March. Over the period 2020-2025 the former Ilva’s crude steel output is to be pushed to 6-6.5 million tonnes/year, while the previous plan indicated 8mt as the target level. Output in 2020 is forecast to hover at approximately 3.4mt, while in 2021 it should go up to 5.3mt based on three operational blast furnaces.
The company will ramp up output until it reaches 6mt in 2025. A new electric arc furnace will be up and running in 2024, replacing blast furnace no.2, while the revamping of blast furnace no.5 will start in 2024. The firm is, however, considering replacing BF5 with a second EAF. This would also significantly reduce CO2 emissions from the Taranto steelworks. Blast furnace no.1 should be idled in 2026, the informed sources tell Kallanish.
The company will consider ramping up production to the pre-Covid-19 forecast of 8m t/y starting from 2025 when steel demand should begin to recover.
3,300 jobs will be cut this year and the future is uncertain for the 1,600 workers from Ilva’s administration who remain on temporary furlough.
According to sources, the company forecasts a dramatic fall of over -60% in consumption for rolled flat products in 2020. Flats demand will recover very slowly due to the systemic crisis of some end-use sectors such as the automotive industry. The consumption reduction in flat products will also lead to overcapacity in Europe of up to 35mt by 2025.
ArcelorMittal declined to comment on the matter when contacted by Kallanish.
According to a union source, Taranto is now producing 7,500 t/day of crude steel with only two blast furnaces, which equates to an annual output of below 3mt.
