Italy, ArcelorMittal in restructuring talks; most north Italy output restarted

ArcelorMittal Italia and Italian government representatives are in talks about agreement on a restructuring plan offered by the company and opposed by the government because it would mean the loss of 3,300 jobs, a source close to the company said July 1.

No further details were available.

Production at AM Italia’s Northern Italy facilities, meanwhile, has been restarted in response to increased demand, offering a possible glimpse for their future.

According to the 2020-2025 plan prepared by ArcelorMittal, steel production in the former Ilva facilities will be ramped up to 6 million mt/year by 2025 rather than 8 million mt/year. The 8 million mt/year target will be reconsidered in 2025 when demand presumably will have returned to pre-coronavirus pandemic levels. Production at AM Italia’s Northern Italy facilities, meanwhile, has been restarted in response to increased demand.

AM Italia’s steelworks in Genoa-Cornigliano restarted production at its No. 5 galvanizing line on June 30 and has started to work at full capacity on its tinplate line, the source close to the company and a union representing workers at the facilities said July 1. The Northern Italian steelworks has four galvanizing lines, but only two have been operative for the past few years. AM Italia’s Genoa-Cornigliano hot-dipped galvanized lines Nos. 3 and 5 have combined production capacity of around 900,000 mt/year. The No. 5 stopped production in March, due to the coronavirus outbreak, while No. 3 has been operating intermittently since March, at very low production. The line started operations in 2016, with a production capacity of 460,000 mt/year. The Cornigliano-Genoa works processes around 1.5 million mt/year of hot band from Taranto, of which 900,000 mt are transformed into HDG on the two lines, while 100,000-150,000 mt are transformed into tinplate and the rest sold in the open market as hot rolled product, mainly sheets. The tinplate lines are also working.

The company also restarted the productions at its HDG line in Novi, which has a capacity of around 450,000 mt and was also halted in March. Also the mill in Racconigi, near Genoa, has restarted two lines of tube productions out seven seven tubes. In total, the facility produces about 140,000 mt of tube when operates at full capacity. All the lines stopped production back in March.

“The Genoa galvanized line will re-stop production in the month of August, but is still a positive news,” the source said. “It also shows the willing of ArcelorMittal to carry on production when and where is possible. At the moment the company is still negotiating with the government the future of the mill, but considering how Italy works I doubt we will have news before the Puglia regional election that are due in September.”

There are that ArcelorMittal could pull out from its Italian asset. AM has an option to withdraw from the troubled works in November. If it does so this could threaten the survival of the Taranto plant, in capacity terms the largest flat carbon steelmaker in the EU. The Italian government’s position about the former Ilva plant was always divided, with some elements favoring the closure of the hot-end facility in Puglia and others wanting to tranform it into a “green mill” using European Commission funds.

The Taranto plant is currently operating only two of four blast furnaces (Nos. 1 and 4) and with most of its cold-end lines temporarily shut, union sources told Platts. The Taranto site is producing around 7,500 mt/d of crude steel, sources said.

AM declined to comment on this issue when contacted while the Italian government representative did not respond.

— Annalisa Villa