The Italian steel industry is planning to resume production little by little after the Easter holidays, as the steel supply chain is running out of stocks and politicians are worried that the pandemic will turn into a crisis with high unemployment rates, Italian industry players told S&P Global Platts on Monday.
“Mill owners, government representatives and unions are in talks to ensure that the health of the workers will be not compromised while at the same time production will resume after Easter so that mills can continue to serve their customers,” a spokesman for Italian steel federation Federacciai confirmed to Platts, underlining however that the discussions are still in due course.
According to the Italian coronavirus decree, all mills should be temporarily shut down with some exemptions until April 13 and then depending on how much the slowdown of the virus has been tackled a gradual re-opening can be put in place.
Politicians are trying to balance economics and safety as company closures and restrictive measures to try to beat the coronavirus are likely to reduce the Italian GDP by around 10-15%. IHS Markit’s latest business data showed confidence fell to the lowest level since the global financial crisis and new orders were at the lowest rates in over 20 years.
It is understood that the first steel mills that will restart production are the one linked to the bio-medical industry as well as with the food, transportation and energy industries.
This week’s new move towards the gradual reopening of mills is supported by the fact that most major mills have been granted a green light by their own local prefects to restart deliveries.
For example, the largest Italian steel producer AM Italia this week will re-start this week commercial steel production. It and Arvedi, the second largest Italian flat steel producer, were permitted to continue producing crude steel, but at their historically lowest levels. According to the coronavirus decree, only the mills that have blast furnaces should have continued to work as well those linked to medical, food and energy markets, although most of them decided to temporarily stop as well.
AM Italia last week re-started production, although only partially, at its rolling mill in Genoa to make tinplate with the aim to arrive at full production by April 20. According to SBB’s archive, Ilva has two tinning lines with a combined capacity of 250,000 mt/year. AM Italia when contacted by Platts declined to comment.
Acciai Speciali Terni, the largest Italian stainless steel producer, will partially restart production at its 400,000 mt a year stainless cold end this week to serve the supply chains of the biomedical, energy and transportation industries, sources close the mill told Platts. The steelmaker’s media unit did not respond to Platts’ query on the matter.
— Annalisa Villa