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Italian steel production likely to slow down in Q2: Federacciai

Milan — Italian steel production is expected to slow down in the second quarter compared with a year earlier due to lower demand from the automotive and construction sectors, Italian steel producer association, Federacciai Chairman Alessandro Banzato told S&P Global Platts on the sidelines of a steel trade fair in Milan Wednesday.

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"Demand in Italy is expected to fall on weaker fundamentals but also due to the longer holidays in the Italian market and the fact that Italy's largest steel produces -- Arcelor Mittal Italia -- will produce less than planned," Banzato said.

Arcelor Mittal Italia said Tuesday that in the first four months of this year it had produced 1.1 million of crude steel, but would produce 1.3 million mt in each of the second, third and fourth quarters, cutting its 2019 production forecast to 5 million mt from 6 million.

In Q1, Italy produced 6.6 million mt of crude steel, 2.1% less year on year.

Banzato said regional market segmentation, fostered by tariffs and global protectionism and a general climate of uncertainty in the industry were challenging not only the Italian but the whole European steel industry.

Banzato, along with many participants in the fair, called for a revision of the EU safeguard measures, in line with Eurofer, the European association of the steel producers to prevent large-scale diversion of steel flows to the EU because of the US' steel tariffs.

Banzato stressed that there must be no increase of the quota at all on July 1. "Any other decision may lead the EU steel industry back to the disastrous situation where it found itself in 2015/16", he said as the 5% quota increase in February alone would far exceed growth in the EU steel market from 2018 to 2010 undermining the overall effectiveness of the final safeguard measures.

European steel, tubes and metal distribution industry association Eurometal also supported a revision of the safeguard measures. "The EU should review its safeguard measures...quotas for the automotive hot-dip-galvanized products, for example, were used up in just three months; other quotas will never be used. We know Turkey is selling unprecedented amounts of plates to EU countries, thus causing distortion to the market," Eurometal President Fernando Espada said.

--Annalisa Villa,

--Edited by Jonathan Dart,