Italy’s Acciaierie d’Italia to produce below 5 mil mt crude steel in 2021: sources

Acciaierie d’Italia, the largest Italian flat steel producer, is likely to close the year below its previous planned production output of 5 million mt, sources told S&P Global Platts on July 13.

The steel unions said that Acciaierie d’Italia is likely to produce 3.5 mln of crude steel this year. When contacted by S&P Global Platts, Acciaierie d’Italia’s spokesman said that the company targets an output of 4.5 million mt of steel by the end of 2021 and that to achieve this, “production will increase to 15,000 mt a day in the second half of the year.”

According to the unions, the company is producing around 10,000 mt of pig iron a day at the moment as only two blast furnaces — No. 1 and No. 2 — are working, while the No. 4 furnace was temporarily shut for maintenance in June. The No.4 furnace was supposed to restart production in the beginning of July but is still temporary offline due to ongoing environmental and technical issues.

The unions and the company spokesperson said that the blast furnace No. 4 was linked to the coke battery number 12, which was directed to be put on idle by Italy’s Transition Ecology Ministry until it met certain standards to make it environment friendly.

“The company appealed at a court in Rome against the minister’s directions and ask for three month extension to meet the environmental requirements, amid COVID-19-related lockdowns that delayed the requisite changes. The tribunal of Rome has already asked to the ministry to reconsider its order to idle Battery 12.” Acciaierie d’Italia’s spokesman said.

The company has a total of five blast furnaces, blast furnace No. 1 and No. 2 each have a designed production capacity of 1.8 million-1.9 million mt/year of crude steel, but they are not operating at capacity. Blast furnace No. 5, the largest in Europe with a production capacity of around 3.5 million mt/year, was idled in 2015. Blast furnace No. 3 has a capacity of about 2 million mt/year of crude steel, but was idled in 1994 and is set to be dismantled.

The steel unions have planned a strike for July 20 to demand more clarity and commitment from the government, union sources told Platts.

The Italian market consumes around 12 million-13 million mt of coils annually, market sources told Platts. In 2020, the country produced about 20 million mt of crude steel and was the second largest European steel producer, according to Federacciai, the Italian federation of steel companies.

Acciaierie d’Italia is the largest Italian flat producer, followed by Arvedi. Arvedi is set to produce 3.6-3.8 million mt of hot-rolled coils this year, close to its installed capacity, Platts reported earlier.

Arvedi has two electric arc furnaces at its headquarters in Cremona. The No. 1 furnace has 1.4 million mt/year of crude steel capacity and the No. 2 furnace was upgraded and expanded in 2020 to increase its capacity to 2.6 million mt/year.

The Italian coils market is going strong, with prices reaching historical levels in June. Prices were softening amid the summer holidays and attractive imports, but domestic prices were still high, Platts reported earlier.

— Annalisa Villa