On March 8, Italian authorities ordered a lockdown across the whole of Lombardy and in 14 provinces in the regions of Veneto, Emilia Romagna, Piedmont and Marche in an attempt to control the outbreak of the 2019-nCoV coronavirus.
A large number of steel producers, including flat steel producer Arvedi and Pittini Group’s wire rod mill, are located in the region now under quarantine.
While the lockdown will not have any effect on production or deliveries of steel goods, it may result in a slowdown of business activity due to the individual concerns of some buyers, market sources said.
The decree issued by the Italian government on March 8 said that goods may enter or leave the areas under lockdown by road as long as drivers follow precautionary measures.
Arvedi has no problems with deliveries or production due to the lockdown, market participants said.
Italian steelmakers have been trading hot-rolled coil at €435-450 ($491-508) per tonne ex-works but were looking for price rises to €460-470 per tonne ex-works.
“Circulation of goods in Italy is free from restrictions,” a trading source in Lombardy said.
Pittini Group, one of Italy’s major long steel producers, confirmed that all of its plants were working normally.
“There are some restrictions but they do not concern shipments of goods,” a source close to Pittini said. “We have to work normally and do our best to stay safe.”
Fastmarkets’ weekly price assessment for steel wire rod (mesh quality), domestic, delivered Southern Europe, was €455-470 per tonne on March 4, widening downward by €5 per tonne week on week due to tough competition between producers.
Although the lockdown has had no direct consequences on shipments, some buyers in both Italy and Germany have been cautious about making deals due to uncertainties related to the coronavirus outbreak, so market activity has slowed down slightly, market sources said.
Long steel buyers in Poland also noted that there have been minor delays of a couple of days in steel deliveries from Italy due to the coronavirus outbreak, but the situation is not critical.
“All phases of the production cycle are continuing as normal, including loading and unloading of goods, in full compliance with all the preventive [measures] and cautionary rules already implemented by the group in recent weeks,” long steel producer Acciaierie Venete said.
“Some buyers are concerned about the uncertain outlook,” a separate Italian source said. “There are a lot of rumors in the market but so far the biggest effect has been the result of some people panicking and not from actual production issues.”
Fastmarkets has compiled a list of major steel producers located in the area under lockdown. They are: Arvedi, in Cremona; Pittini’s Acciaierie di Verona, in Verona; AFV Beltrame’s plants in Vicenza, Venice and San Didero; Alfa Acciai in Brescia; Acciaierie Venete’s plants in Padova and Sarezzo; Marcegaglia’s plants in Boltiere, Lomagna, Lecco and Ravenna; NLMK, in Verona; Duferdofin-Nucor, in San Zeno Naviglio; and Ferriera Valsabbia, in Odolo.
The recent extension of the health quarantine area in the north of Italy will not affect steel production or deliveries, sources told Fastmarkets on Monday March 9.