Italian SSCs debate impact of possible Ilva idling

Italian steel service centre (SSC) sources debated the impact on the Italian market of the possible idling of Ilva’s production at this week’s EUROMETAL meeting in Milan attended by Kallanish.

The situation with Ilva is fluid following ArcelorMittal’s announcement of its intention to relinquish control of the company and start the procedure to stop production units. Italian service centres are thus getting prepared for a number of different scenarios.

A senior executive noted that he believes the Italian supply chain started preparing for this possibility from August onwards. He added that Italian SSCs have showed in the past that they are quick to react to changes, meaning the lack of supply from Ilva would not represent a major issue.

Other sources nevertheless noted that in the short term some problems may arise. A major coil buyer stressed that imports might be the sole solution for SSCs needing to replace the lack of volumes from Ilva.

“I am sure we will be able to find the material we need, but at what price it is still unclear,” a source at an SSC said. “We will receive more expensive offers and we might need to re-discuss the safeguard system with the EU as a consequence of the lower supply from Ilva.”

In 2018 Ilva produced some 4.5 million tonnes of steel products. Before its decision to leave the company ArcelorMittal said that production levels this year would have reached a similar level, despite previously targeting an output of 6mt.

This week ArcelorMittal reopened negotiations with the Italian government over its presence in the country. The outcome of such negotiations remains very much uncertain but sources at the EUROMETAL event were all negative about the possibility of a U-turn from ArcelorMittal on its decision to leave Ilva.