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AM Italia sites to strike as production cuts, 4,700 jobs threatened

  • Author
  • Annalisa Villa
  • Editor
  • James Burgess
  • Commodity
  • Metals

London — Workers at ArcelorMittal Italia, Italy's largest flat steel producer, will go on strike Tuesday December 10 after the company set out plans to cut production and 4,700 jobs at the former Ilva site by 2023, union sources told S&P Global Platts Thursday.

The company presented its plans for the former Ilva site to unions and Italian government representatives Wednesday afternoon, union sources said. ArcelorMittal has changed its planned production volumes for Ilva since it bought the company from the Italian government in 2018.

The Italian government rejected the plan, and now is working on an alternative that it will present soon. A meeting is likely to be held Monday, sources told Platts.

ArcelorMittal Italia wants to produce around 4.5 million mt/year of crude steel next year, according to slides seen by Platts, with three blast furnaces: BF1, BF2 and BF4 that are operational now. This would make AM Italia production in line with this year's.

It plans to raise production to 6 million mt/year of crude steel from 2021 to 2024, initially using the same three blast furnaces. BF2 will stop production in 2023 to be replaced by a new electric arc furnace that will use a hybrid solution with scrap, pig iron and direct reduced iron. The new EAF investment would be around Eur230 million and will have lower carbon emissions.

Under the previous plan agreed with the Italian government in 2018, ArcelorMittal said it would increase Ilva's output to 6 million mt/year of crude steel from 4.5 million mt/year currently, and then systematically lift output to 8.5 million mt/year by 2023 with around 11,000 workers.

The new plan depends on the pending decision for BF2 in which the court in Taranto will rule by December 13 on whether to keep it operational.

AM Italia announced November 4 it would have to withdraw from the Ilva agreement after the Italian Parliament removed legal protection from the company, leaving its managers liable for prosecution over environmental issues. The decision was also made as a result of the court in Taranto obliging the Ilva extraordinary commissioners to meet certain conditions at the works by December 13, failing which BF2 would be shut down.

The special commissioners filed an urgent appeal in court in Milan in response. The hearing was recently postponed to December 20 giving AM and the Italian government time to find common ground.

Under the new plan, the company will not revamping BF5, the largest of the former Ilva plant, with a capacity of around 4.5 million mt of crude steel a year. The revamping of linked batteries 10 and 11 will also not go ahead, saving the company Eur250 million. The company will also save an additional Eur180 million through reducing the size of the iron ore park and avoiding work on BF2.

ArcelorMittal declined to comment on the discussions.

The uncertain future for Italy's largest coils producer has added upward pressure to prices, amid lower supply, stronger demand and higher raw materials prices. Other domestic mills are back in the market with new Q1 asking price targets that climbed to Eur450-460/mt base ex-works in the last few days, market sources said. HRC prices south Italy were assessed at Eur418.5/mt ex-works Thursday, up by Eur5/mt on the day.

-- Annalisa Villa,

-- Edited by James Burgess,