Insight: AM Italia seeking commitment by all stakeholders

Future prospects for ArcelorMittal Italia, which suffered a worker fatality last week and ongoing environmental and safety concerns, continued to be uncertain Monday as an awaited meeting of representatives of the union, company and Italian government did not end with answers from all the parties. After the meeting ArcelorMittal released a press note expressing the need for a commitment from all stakeholders to keep the plant operational.

“Last week’s accident is a tragedy as we have been working hard to improve safety standards as well as continue with our environmental investment program, which is progressing well and according to schedule. Even though there are and will be differences of opinion, if all stakeholders want this plant to have a future we must work together to achieve that…it is critical that all parties focus on finding solutions to the challenges that we face. This is not something that we can do alone” ArcelorMittal stated late Monday.

The status of the steelmaker’s blast furnaces was not discussed in the note and when asked about it by S&P Global Platts an ArcelorMittal spokesperson declined to comment. Sources at the meeting pointed out how the situation is still “very fluid with AM Italia that is working to re-start production at the blast furnaces – all of which were in operation before unions called a strike.”

BFs Nos. 2 and 4 were banked following full strike action in the early hours of Thursday due to safety concerns. Unions decided to strike after a fatal accident occurred late Wednesday when a crane at the Taranto works’ raw materials pier fell into the sea, resulting in one fatality.

BF No. 2 has been working with a crude steel production target of 1.5 million mt/year with No. 4 at 1.5 million mt/year. BF No. 1, which was operating without any problems, is understood to have been temporarily banked during the weekend, sources said. BF No. 1 has been working with a crude steel production target of 1.2 million mt/year.

The ArcelorMittal spokesperson confirmed that pier 4 at the Taranto works was seized by the authorities following the crane accident and that they are looking for alternative solutions to dock large raw materials ships.

AM Italia on Friday declared force majeure saying it was unable to determine how long it would continue. The fatal accident is not the only issue, as the latest development occurred on the heels of an Italian public prosecutor on July 9 ordering a production halt of BF No. 2 following allegations that improvements promised for the works after an accident there in 2015 — when the mill was under previous management — had not been fully undertaken.

ArcelorMittal also has been engaging with the Italian government on the so-called Crescita law decree, under which the government wishes to cancel the steelmaker’s criminal immunity regarding pollution remedies adopted at the site. ArcelorMittal has already said that this new decree “will make it impossible for the company to continue to operate,” with some company representatives hinting that the company could now pull out of new investments if tensions continue with the government.

Market sources called by Platts confirmed that the confusion surrounding AM Italia is putting customers off buying from them. According to market sources, other Italian flats producers are not quoting at the moment, while imports mainly from Turkey are Eur10/mt more expensive than the local producers, with Italian HRC reported to be around Eur450/mt base ex-works.

“This situation is exacerbating a market that is already difficult with a lot of buyers that are holding off on weak demand and a lot of incertitude,” one buyer said, confirming that he is not bidding for any materials.

— Annalisa Villa