Arvedi AST suspends production in Terni until the end of November

The production shutdowns are related to efforts to balance supply and demand in the stainless steel market

Arvedi Acciai Speciali Terni (AAST) has announced a temporary suspension of production at its plant in Terni (Italy) from November 20 to 30, 2024. The decision is part of a production control strategy aimed at avoiding overloading equipment and stabilizing the stainless steel market, Kallanish reports.

A similar shutdown already took place at the end of October, and at the end of September, the company took one of its two electric arc furnaces out of service for a week. Such measures are designed to balance supply and demand amid low demand and falling prices for stainless steel in Europe.

At the same time, AAST is facing serious challenges due to high energy costs in Italy, which are three times higher than in other European countries. This significantly affects the competitiveness of the Umbria plant.

To reduce costs, AAST has switched to purchasing cheaper Asian slabs, but this does not solve the problem of competitiveness not only with imported suppliers but also with European producers amid the high cost of electricity in Italy. From January to July, the Terna plant paid an average of €97 per MWh of electricity, while in France this figure was €21, in Germany – €32, in Finland  – €35 and in Spain – €62.

As GMK Center reported earlier, global stainless steel production in January-June 2024 increased by 6.3% year-on-year – to 30.37 million tons. During this period, Europe, including Ukraine, increased its stainless steel production by 0.3% compared to the first half of 2023, to 3.14 million tons.