Milan steel fair gripped by talks on ILVA impact, import curbs

Steel industry participants gathered at Made in Steel fair in Milan, Italy, this week ahead of large changes expected in the Italian and wider European steel industry.

Key producer ILVA's new ownership is expected to be revealed at any time and EU and US trade protectionism is on the rise.

Marketers and buyers from steel producers, processors and stockholders, along with products and raw materials traders, heard of continuing declines inimported volumes from China to the EU.

Levels of hot- and cold-rolled flat coil from China through first-quarter 2017 fell at slower rates, to build on 2016's annual declines in Chinese volumes to the EU, as analyzed by European distributor industry body Eurometal.

Antidumping measures in Europe were heard to have dissuaded greater Chinese participation in exhibiting at Made in Steel, the seventh conference held every two years since 2005.

Italian and other southern European industry groups, along with northern European mills such as Dillinger and SSAB, provided the bulk of attendance.

Northern Italy's industrial groups served by specialist and stainless steel companies, and metal processing plant suppliers at an event next door, were reminders of the region's industrial focus.

Baosteel Italia Distribution Italia, awarded best international stand at the fair, promoted China's Baowu group offer of flat steels, after Baosteel's merger with Wuhan Steel since the last fair.

Duferco International Trading Holding and other Duferco units represented shareholder Hebei Iron and Steel Group.

India's JSW Steel, leading one of the two bids to buy steel producer ILVA, also exhibited. Turkish flats and longs mills such as Colakoglu and IDC, Ukraine's Metinvest and Russia's NLMK were other non-EU steel groups with a significant presence.

As for ILVA, the likely impact to the market of a new owner for the company range from effects on steel distribution to competition in product supply, particularly in southern Europe, and further up the chain.

Scrap and raw materials purchasing and strategy may differ based on whether the JSW- or ArcelorMittal-led bids win, local industry executives said May 18 at an event at Made in Steel organized by industry group Assofermet and Siderweb.

The change at ILVA is expected to be felt in European steel import volumes, as JSW Steel would have its own plant in Europe, sources have said.

ILVA's Taranto plant, operating for now at a reduced capacity under a target based on government control, may likely see different kinds of operational changes, based on expectations surrounding plans from the two bidding groups.

These include investment in an EAF/DRI plant, a higher rate of blast furnace-based steel production, and adapting the mix and ratios of raw materials from iron ore pellets, fines and lump, along with HBI, scrap, merchant coke and coking coal.

While talk around looming changes with ILVA took on much attention at the fair, Made in Steel highlighted Italy's pivot position in the markets between flat and long steel producers, merchant re-rollers, and ferrous scrap and metallics suppliers.