Italian steel producers are still operating despite the coronavirus outbreak and the stringent measures put in place by the government. However, the situation is very fluid and could change in a matter of hours, sources said.
Monday night the Italian government extended the lockdown of northern Italy provinces to the entire country. Until at least April 3, under a government decree, all public events are banned; cinemas, theaters, gyms, discos and pubs are closed, and funerals, weddings and sporting events cancelled. All schools and universities will remain closed.
Under the new decree, people will only be able to travel between cities for emergency reasons and can face fines and up to three months in jail for breaking quarantine rules.
Steel production and order deliveries are still underway, but with special attention to new safety measures.
The strict action was taken after the number of coronavirus deaths in Italy rose from 366 to 463 on Monday, according to the head of the country’s civil protection agency. Nearly 8,000 people are infected, the majority in the provinces of the northern region of Lombardy, which has the largest concentration of steelmakers and re-rollers and where nearly half of Italy’s 23 million mt/year of crude steel is produced.
According to Italian newspapers, some of the regional governors where the outbreak is most severe, such as in Lombardy and Veneto, are seeking a stoppage of all work activities for two weeks and a quick restart, thereby contributing to situation’s fluidity.
Scrap dealers said that some leading Italian mills are considering a plan to make some stoppages now, as scrap prices were expected to rise after the rebound of Turkish prices, which are now on hold at around Eur240-250/mt delivered to mills for the E40 grade.
Some mills contacted by S&P Global Platts said they are pondering temporary stoppages but they want to do it in a planned way without disrupting their customers. “These are extraordinary times, but we have a good work ethic in particular in this part of Italy so we have to see how we can operate with our stocks,” said a market source in Lombardy. “We want to continue to serve well our clients but of course we have also to take care of our employees and help this situation go back to normality.”
“In Lombardy there are a lot of long [steel] producers and considering that rebar prices are not doing so well stopping production for two weeks could be not so negative,” a senior industry source commented. “Let’s put it this way 15 March could become like 15 August when mills stop for their summer stoppages.”
According to the weekly Platts price index, northwest European domestic rebar prices softened last Friday to Eur452.50/mt ex-works, down Eur7.50/mt on week, with Italian rebars reported around Eur400/mt FOB.
— Annalisa Villa
