One more Italian long steel mill suspends production

Italian long steel producer Feralpi Group has announced the closure of one of its mills, starting from March 16, due to the outbreak of 2019-nCoV coronavirus, the company told Fastmarkets on Friday March 13.

On March 11, Italian authorities issued another decree intended to help restrict the spread of the coronavirus infection, tightening the lockdown across the country from the conditions set out in a previous decree on March 9.

While there were no explicit measures to restrict or stop steel production, some mills made the decision to shut down their facilities anyway. The new decree will be in force from March 12 until March 25.

Feralpi Group said that it would close its mill in Lonato from Monday of next week.

The company also runs mills in Calvisano and Brescia, but no specific decision has been made about those facilities. “Only Feralpi Siderurgica will stop activity. For the other companies [in Italy], there will be an individual assessment to adopt specific measures,” the company’s spokesman said.

“The situation is very changeable and each company is making its own decisions day by day,” Feralpi told Fastmarkets.

Earlier this week, four other steel producers in Italy – Alfa Acciai and Ferriera Valsabbia, and Duferdofin-Nucor and Tenaris Dalmina – also stopped production.

At the same time, one long steel producer in Northern Germany was considering suspending production for around two weeks, market participants said. Poor demand in Germany for long steel, particularly rebar, was the key factor behind that decision, sources told Fastmarkets.

Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, delivered Southern Europe, was €435-450 ($488-505) per tonne on March 11, narrowing downward by €5 per tonne week on week.

And the weekly price assessment for steel reinforcing bar (rebar), domestic, delivered Northern Europe, was €475-485 per tonne on March 11, flat week on week.

Trade unions demand country-wide stoppages
Italian trade unions Fim, Fiom and Uilm have been requesting that the country’s authorities introduce nationwide mandatory stoppages of steel operations until March 22, to stop the spread of coronavirus.

Flat steel producers in Italy have not stopped their operations yet, according to market sources. Nevertheless, the lockdown has resulted in frozen market activity, and logistics problems are mounting due to a shortage of truck drivers, market sources said.

Two other trade unions, Fim Cisl and Usb, have been calling for a strike until March 22 at flat steel plant ArcelorMittal Italia, according to market participants. Sources said that these unions have also asked the plant to run at a lower production rate to minimize the required workforce, but other unions have not supported the strike call.

“Negotiations on a strike are continuing with [trade] unions and [the outcome is as yet] unclear,” an Italian distributor said.

Fastmarkets’ daily steel hot-rolled coil index, domestic, exw Northern Europe, was €481.18 per tonne on March 13, down by €1.32 per tonne day on day from €482.50 per tonne on March 12.

Today’s index was calculated based on deals and “workable” prices heard at €470-490 per tonne ex-works.

Italian steel producers have been offering and trading HRC at €440-450 per tonne ex-works, according to market sources.

Logistics problems and the risk of plant closures could reduce interest in Italian flat steel among Northern European buyers, which could choose to purchase more from Northern mills, thus lending support to domestic prices, market sources told Fastmarkets.