Italian crude steel output up 19.8 % in 2021 amid strong demand

Italian crude steel production in 2021 was up by 19.8% to 24.41 million mt amid strong demand for both long and flat products, although December recorded the first year-on-year fall in 12 months as mills reduced production on high energy costs, data released Jan. 20 by iron and steel association Federacciai showed.

Last year’s output also surpassed the 23.192 million mt in 2019, the last full year before the pandemic.

In December, crude steel production was down by 7% year on year to 1.5 million mt as mills were hit by the soaring energy costs. Long steel long products registered a decrease of 5.1% to 814,000 mt, while flat products were down by 3.9% to 781,000 mt.

The head of Federacciai, Alessandro Banzato, recently underscored in an interview with S&P Global Platts that high energy prices are an ongoing problem which could dent the positive outlook for 2022 unless addressed by the government.

Energy costs are the second most important cost for steel producers after raw materials. For the most electro-intensive producers, electricity represents approximately 20% of converting globally priced raw materials into finished steel products.

According to Federacciai data, electricity costs rose to an average of Eur124.37/MWh ($142/MWh) in 2021, against an average cost of Eur36.12/MWh in 2020. In December alone, average prices reached Eur281,24/MWh. The “typical” electric arc furnace without oxyfuel burners uses 475 kWh of power per metric ton of steel produced.

Crude production in 2021 started to pick up in March last year with prices that reached their highest historical level in mid-June.

In the whole 2021 long production went down by 21.8% to 13.6 million mt while flat production decreased by 16.6% to 11 million mt.

— Annalisa Villa