The Milan Court of Appeal has ordered Acciaierie d’Italia (ADI), formerly known as Ilva, to shut down production in the hot section of its Taranto steel plant within the next 90 days, according to a ruling released on 27 July.
In order to resume operations, the court requested the complete removal of all asbestos present at the site and the implementation of measures to reduce dust emissions to the regulated limits.
The Milan court originally ordered the suspension of production at the Taranto plant on health grounds in late February 2026, but the ruling was conditional on the completion of required environmental interventions.
Immediately after the latest court decision, the President of the Council of Ministers of Italy, Giorgia Meloni, convened an urgent meeting in Rome, and the authorities also met with trade unions on 28 July.
The UILM trade union called for an eight-hour strike and requested that the authorities work together to find a solution.
“Ninety days is a scary number, but we’re not afraid, and these ninety days must be used to the fullest to build a set of concrete solutions,” UILM General Secretary Davide Sperti said. “Over the next ninety days, the government must assume responsibility for guiding this process, ensuring transparency, resources, and a strong public presence. There is no longer room for delays, partial solutions, or operations constructed without the involvement of workers. This time, time must be used to make decisions.”
The unions will meet with the Ministry of Enterprises and Made in Italy (MIMIT) and local authorities next week.
The decision of the court and its impact on the future of ADI were characterised as “asbestos and chaos” by a source close to the matter, and the doomsday attitude was echoed by an Italian distribution source who said that “we are witnessing the agony of Ilva”.
Market sentiment, however, was not entirely pessimistic, and sources believe that the Italian authorities will find an alternative solution, possibly by providing guarantees that the emission issues will be resolved in order to postpone the implementation of the court ruling and secure the sale of the plant.
Upcoming sale of ADI
The ruling came at a sensitive time as ADI is about to be sold, and the plant requires additional funds to operate until the deal is finalised. Italian authorities have been discussing an additional EUR100 million to allow the plant to continue operating.
The two bidders for ADI are India’s Jindal Group and US investment firm Flacks Group. The latter is understood to be preparing to create a new Italian steel company called Flacksider, cooperating with other steel companies to acquire ADI, according to market sources.
In June, Flacks Group confirmed that it had established a technical working group to develop an industrial plan for ADI. The group included Luca Villa, CEO of Metinvest Adria, and Alberto Perin, Plant Sales Director and Chief Marketing Officer at Danieli Group.
In March, Jindal Steel expressed interest in acquiring ADI, returning to the race for the mill after withdrawing in 2025.
Both potential buyers have presented decarbonisation plans to replace the existing blast furnaces (BFs) with a direct-reduced iron (DRI)-electric arc furnace (EAF) production route.
Market participants suggested that Jindal Steel was looking to acquire European steelmaking capacities to roll semi-finished products from its new steel plant in Oman, which will produce low-CO2 steel.
To learn more about decarbonization projects in Italy, Oman and globally – see McCloskey’s Global Green Steel Profile.
Steel market reaction
“The ruling on the former Ilva represents the culmination of a judicial approach that ignores industrial reality. Demanding the removal of asbestos from the blast furnaces means imposing a requirement that is incompatible with the plant’s very technology: it is like demanding that a car operate without an engine,” Antonio Gozzi, President of Italian steel association Federacciai, said.
Gozzi also highlighted that if the same requirements were applied to other steelmakers, all BFs would have to shut down because the production route would no longer be viable, according to Federacciai.
Although ADI has been largely absent from the spot market, operating at reduced rates and focusing on deliveries to long-term customers, any further reduction in domestic output would have a major impact on the European steel coil market.
The ruling to close ADI’s furnaces came after the new tariff-rate quotas (TRQs) for steel imports came into force in the EU on 1 July. This resulted in significant cuts to import availability for coil and pushed European buyers towards domestic steelmakers to substitute lost import volumes. Notably, several distributors had to cancel or divert orders for imported hot-rolled coil (HRC) due to fully utilised quotas.
The restricted import availability has supported a rise in domestic coil prices in Europe in July, and the uptrend is expected to continue through the remainder of the year.
McCloskey’s domestic HRC price assessment in Italy was EUR700/t ex-works Italy on 24 July, up EUR35/t since the start of the month.
Market participants have already said that buyers requiring significant imported HRC volumes as feedstock, such as re-rollers and pipemakers, face significant shortages due to the new quotas, and the ordered closure of ADI would further reduce availability.
On 13 June, the Italian Supreme Court ruled against the restart of operations at ADI’s BF No. 1, stating that the equipment would remain under seizure. The furnace has remained shut down since May last year following a fire.
ADI currently operates only one blast furnace and is not present in the spot market, supplying limited volumes of flat steel only to contract-based customers.
Author: Maria Tanatar
