ArcelorMittal Italia workers in Taranto plan strike over lack of clarity on future

ArcelorMittal Italia workers based in Taranto are planning to go on strike Sept. 24 as they want clarity about their future after production was halted across most of the Puglia-based site, union representatives told S&P Global Platts Sept. 22.

Since Sept. 21, the mill has suspended output from most of the cold-end units, while in the hot-end part, the company has reduced already low crude steel output even more, it said. At two of the four blast furnaces — No. 1 and No. 4 — daily production was cut 200 mt to 7,300 mt, its lowest ever.

In the cold-end part, the No. 1 galvanized line and the No. 1 cold rolling mill stopped production on Sept. 21, while at the No. 2 train mill, daily sheet production was cut to 15 from 21.

With these lines off, “we can basically say that the entire cold-end line is temporarily shut down, with the exception of rolling mill No. 1 and melting shop No. 2. According to ArcelorMittal, this is due to low demand while we think it is more of a political issue as demand for coils is picking up,” a union source said.

Union sources also said that since Sept. 14, 600 workers have been furloughed under a coronavirus-related scheme, making the total number of ArcelorMittal Italia employees furloughed 5,600. Around 8,000 workers are employed at the Taranto site.

Italian minister for economic development, Stefano Patuanelli, said Sept. 22 he was ready to meet the unions at their request.

Union representatives said the strike will be confirmed depending on the outcome of the talks, but they are still continuing to plan it.

On Sept. 21, the governor of the Puglia region, Michele Emiliano, was re-elected, a result that could be another reason, according to some industry sources, for the exit of ArcelorMittal from its purchase of Ilva as the relationship between the two was never good.

ArcelorMittal has an option to withdraw from the troubled plant in November. If it does, it could threaten the survival of the Taranto plant.

ArcelorMittal did not immediately respond to a request for comment.

— Annalisa Villa

German mechanical engineering seen contracting 17% in 2020

Despite signs of a slight recovery for Germany’s mechanical and plant building industry, weak demand is likely to keep having a noticeable impact on production.

Incoming orders in the sector fell by -16% year-on-year in January-July, and production was down -14%, according to industry federation VDMA. “We therefore expect a -17% drop in production for the year 2020 as a whole,” Kallanish hears from its chief economist, Ralph Wiechers.

The industry is fighting against the consequences of the global coronavirus pandemic and against protectionism in international trade. Moreover, it is challenged by industrial changes, particularly noticeable in the automotive industry, Wiechers emphasises.

Average capacity utilisation fell well below the long-term average of 86%. Between January and July it dropped to 76.1%, its lowest since 2010, VDMA states. For 2021, VDMA economists assume the global economy will recover, albeit hesitantly and not necessarily without disruptions. They expect production to rebound by 2% next year. A prerequisite for further recovery is that the pandemic does not again paralyse markets and supply chains, VDMA notes.

Italian government fast tracks Ilva private-public partnership

A clearer definition of the new public-private partnership for troubled steelmaker ArcelorMittal Italia may be announced as early as October, Italian economic development minister Stefano Patuanelli has told unions. This comes as negotiations with ArcelorMittal are progressing, Kallanish learns from union representatives.

Workers at the Taranto site have implemented a series of strikes to protest over the plant’s near inactivity and the condition of the outdated and unreliable equipment. Unions, however, revoked the latest strike planned for 24 September after meeting Patuanelli in Rome on 23 September. Patuanelli also spoke about €3 billion ($3.5 billion) of total investment needed to modernise the plant, which should include European funds, Kallanish hears.

The Italian government has allocated €470m to becoming a shareholder in ArcelorMittal Italia, through its investment body Invitalia. The state is carrying out due diligence to determine the true value of the steelmaker, after which it will decide whether it becomes Ilva’s majority shareholder.

Meanwhile, ArcelorMittal Italia is pursuing upgrade works at the Taranto site and carrying out environmental tests. These will include further soil characterisations on the land using 3D conceptual and hydrogeological models. The aim is to collect further information to update ongoing containment works and to plan the mitigation works in the area, minimising the impact on the operation of the steelworks.

Italian energy company Eni Rewind, Eni’s environmental subsidiary, has been appointment to assist in the design of reclamation works in Taranto.

ArcelorMittal Italia also completed the replacement of converter exhausts at meltshop no.2 during the August summer break.

Broader recovery returns global steel output to growth

Crude steel production in the 64 countries reporting to the World Steel Association (worldsteel) inched up 0.6% on-year in August to 156.2 million tonnes, the first growth since March. China, Vietnam and Turkey were again the main actors behind the growth, but production also recovered in more countries, Kallanish notes.

China and Vietnam saw production hikes of 8.4% and 33% respectively to 94.85mt and 2.32mt. Indian, Japanese and South Korean output, however, fell -4.4%, -20.6% and -1.8% respectively to 8.48mt, 6.45mt and 5.8mt.

The EU28 saw output slump -16.6% to 9.32mt, with German output down -13.4% to 2.83mt. Italian and UK production, however, rose 9.7% and 11.2% respectively to 939,000t and 566,000t.

Turkish output continued its recovery, rising 23% in August to 3.24mt.

US production slumped -24.4% to 5.59mt but Brazilian output was up 6.5% to 2.7mt.

CIS production fell -6.2% to 7.93mt, with Russian output estimated to have dropped -4.6% to 5.55mt and Ukrainian production down -5.7% to 1.83mt.

Global steel output in January-August nevertheless still dropped -4.2% on-year to 1.19 billion tonnes.

For antitrust reasons worldsteel no longer produces a monthly global capacity utilisation ratio. Information on capacity can be found on the OECD website, worldsteel says.

ArcelorMittal Bremen restarts blast furnace

ArcelorMittal Bremen has restarted its blast furnace No.3, which was already idled before the outbreak of Covid-19 in October last year. The decision has been taken partly due to a recovery of demand, but also to compensate for the ongoing reline of a blast furnace in Ghent, Belgium, Kallanish learns from a spokesman.

Bremen’s two blast furnaces together have a capacity of 3.6 million tonnes/year of pig iron. BF3 is the smaller one which accounts for about one third of production, or some 3,500 tonnes/day.

Its restart will contribute to an overall increase of pig iron and crude steel production in Germany, which in August was again notably lower than in August 2019. Crude steel output totalled 2.82 million tonnes, -13% down year-on-year, according to steel federation WV Stahl. The dip was more pronounced for oxygen route steel (-16%) than for EAF route steel (-6%).

From January through August, crude steel production sank by -17% on-year to 22.71mt.