Paragraph entered by Atlantic migration, in order for SteelFirst articles to display correctly on Metal Bulletin.
The company and its problems were gradually pushed out of the public eye by other media concerns throughout 2013, sources close to the company told Steel First. This has given Ilva the opportunity to restore, at least in part, its image and its business reputation in 2014.
The first suggestion of pollution concerns and breaches of environmental law at the Taranto steelworks in the southern region of Puglia was aired in July 2012.
Ultimately, several company officials were arrested for a variety of alleged crimes, including corruption and severe breaches of environmental law.
But although Italian steel production was reduced throughout 2013 because of the persistently low capacity utilisation at Ilva’s steelworks, a source close to the company told Steel First that “the company’s image has been improving” in recent months.
And while Taranto’s problems were a concern locally, other areas reaped the benefit. According to figures released by the Port of Savona in northern Italy, the volume of imports coming through the port in 2013 increased by 56% year-on-year as a result of the situation at Taranto.
Total volumes for iron and steel traffic, including steelmaking raw materials, amounted to 139,108 tonnes in 2013, up from just 89,481 tonnes in 2012.
Ilva, meanwhile, is still only operating at between 50% and 60% of its total capacity, market sources say.
Confidence is gradually being restored, however, the source close to the company added, “now that funds have been returned” to the steelmaker.
Return of funds
Late on December 20 last year, the Italian High Court overturned an earlier decision by a local court to seize the financial assets of the Riva Group, owner of Riva Steel and ultimately of long-troubled Taranto, Europe’s largest steel plant.
The High Court’s decision promised the full return to the Riva Group of €8.1 billion ($11 billion), seized in September 2013 to compensate for the long-term pollution caused at the plant.
One source told Steel First that the court’s decision had important implications “not only for the Riva family, but for the Italian judicial system”.
“Finally, it appears that things are working in Riva’s favour,” the source close to the company commented.
Last year also saw the appointment by the Italian government of a special commissioner to oversee the refurbishment of the Taranto steelworks.
Enrico Bondi was appointed on June 4. He is due to present both business and environmental plans early in 2014 to track the progress of the Riva-owned business.
“Bondi is not only a good manager, he is very clear on his political stance,” a second source told Steel First.
“His no-nonsense and focused approach to reorganising the company while it undergoes essential environmental updates has somehow meant that people have meddled less in the problems of individual [Riva] family members,” he added.
Arrests of members of the Riva family have become “less of a glamorous news story”, he said, adding that the detention of Fabio Riva in London in January 2013 was the “last scandal of its kind last year”.
Fabio Riva, former vice-president of the Riva Group, was put on house arrest in November 2012 along with six other men, all on suspicion of being involved with corrupt payments offered to officials who came to check for pollution at the Taranto steelworks.
He subsequently went missing but reappeared in London two months later. He surrendered himself to the police on January 22, according to local media, after hearing that a warrant for his arrest had been extended to the whole of Europe.
Blast furnace restart
Despite reduced production volumes, a spot improvement in apparent demand brought about the restarting of Taranto’s third blast furnace in the last quarter of 2013.
Post-summer restocking was behind the relighting of the furnace, despite market sources maintaining that “nothing [had] improved on the steel market in terms of real consumption”.
And a source in Italy told Steel First that the Riva Group would “not be able to raise production in the short term because of the continuing maintenance work and environmental upgrades” being undertaken at the Taranto plant.
While the variety of events that took place throughout 2013 led to a less gloomy end to the year for the company that was once labelled the world’s “unluckiest” steel producer, market sources warned that “it is hard to know how the Ilva saga will turn out”.
One Italian trader told Steel First that it was “really difficult to guess the real effect of [2013’s events] on future activity at the company. There are many problems still unresolved [so] who knows if and how this never-ending story will finish?”
The positive conclusion to 2013 seen by long-suffering Italian steelmaker Ilva and its owner, the Riva Group, could indicate that the company’s plant at Taranto will experience a smoother ride in 2014.