Traders active in southern Europe have welcomed the decision by Ilva’s administrators to appoint the ArcelorMittal/Marcegaglia consortium as the winner of the race to take over the Taranto-headquartered mill, Kallanish learns from sources.
“I believe it is good news as with this acquisition ArcelorMittal will occupy the space that would have been occupied otherwise by a new competitor in the European market,” a senior trader comments.
As reported, the other consortium bidding for the acquisition of Ilva was a joint venture lead by Indian steelmaker JSW, currently among the main suppliers of coil into Europe.
Traders in southern Europe believe that ArcelorMittal will work towards increasing the pricing power of European mills, while the boost in production will be limited. “I believe they will find it difficult to boost output at the blast furnace, but certainly they will focus on supplying the rolling lines located in Genova and Novi Ligure with slabs from their other operations in Europe to increase vertical integration further,” a trader notes.
ArcelorMittal earlier explained that it plans to boost the output of Ilva to 9.5 million tonnes of finished steel products in 2018, significantly above the 5.9mt sold by Ilva in 2016.
Another trader located in Italy concludes that independent service centres in the country might fear that prices from Ilva could increase slightly as a result of the integration into the ArcelorMittal group. However, on the imports front the Indian suppliers could increase slightly their aggressiveness and traders will have more space to offer alternatives to European supplies.
