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Acciaierie d'Italia evaluating restart of shuttered 2 million mt/year Taranto blast furnace: sources

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Acciaierie d'Italia evaluating restart of shuttered 2 million mt/year Taranto blast furnace: sources

Highlights

Blast furnace shut during earlier restart

Two of five blast furnaces at ex-Ilva plant operating

Demand for coil exceeding supply

Acciaierie d'Italia is assessing whether it can restart production at its blast furnace No. 4, which experienced a "technical problem" while restarting operations were underway a few days ago, union sources at Italy's largest flat steel producer said Oct 27.

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The problem is in the blast furnace's crucible, or "heart," the sources said. Blast furnace No. 4 is one of three blast furnaces at Acciaierie d'Italia facility in Taranto, with production of about 2 million mt/year of crude steel. Its restart was welcomed by the market because it would have increased production at the plant, the former Ilva plant, to 6 million mt a year.

Blast furnace No. 4 was temporary idled in March for refurbishment. Sources close to the mill said it was not clear if the company can restart the unit because of its severity and because repairs to the crucible can be challenging.

Taranto-based Acciaierie d'Italia could not be reached for comment.

The company is currently operating two other 2 million mt/year blast furnaces Nos. 1 and 2. It has also other two blast furnaces: No. 5, the largest in Europe, with a production capacity of around 3.5 million mt/year, and which was idled in 2015. There are market expectations that, following a new Acciaierie d'Italia industrial plan, No. 5 will go under a "revolutionary" refurbishment to enable its operation without polluting. The plan has not yet been disclosed, but market sources have said it is expected to be released by the end of this year. Blast furnace No. 3 has a crude steel production capacity of around 2 million mt/year, but was idled in 1994 and is due to be dismantled.

"With the Italian [coils] and general coils market doing well, not only is it a pity for the company itself not to be able to produce more and increase its profitability, but for the market in general, as there is more demand that supply," a source said.

The price of hot-rolled coil in Italy, as well as the entire EU, reached a record high in June, but then decreased as demand went down following a large May-June restocking period. Prices have gone down by Eur35/mt since the start of October, to Eur920/mt, with sources saying they expect prices to move up again on low supply levels.

"We definitely need extra materials in the market, in particular what we need are the 'verticalized materials' that are coming from the Acciaierie d'Italia sites in Genoa and Novi Liguri," a trader explained. A

Acciaierie d'Italia produces black coils in Taranto that most of them are rerolled in Genoa and Novi Liguri into cold-rolled coil, galvanized products and tinplate. But with Taranto that is not working at full capacity, its rerolling sites also cannot. Union sources in Genoa have confirmed the plant there is working at about 70% of capacity.