Italy’s Arvedi AST to suspend EAF operations amid high electricity prices

Italian stainless steelmaker Acciai Speciali Terni (Arvedi AST) has planned to shut down one of the two electric arc furnaces at its Terni plant at the end of September. This is reported by La Nazione.

The shutdown will last about a week. The reason for this decision is the company’s high electricity costs, which do not allow it to compete with growing imports from Asia at lower prices.

Arvedi AST reported that electricity costs in Italy are three times higher than in other European countries where its competitors are located. It is noted that this jeopardises the plan to restart the plant and negates the efforts made to improve efficiency, as well as the benefits of the significant investments that Arvedi has already made. For example, in the first seven months of the year, the company’s average cost of electricity was €97/MWh, compared to €21/MWh in France and €32/MWh in Germany.

The shutdown of the electric furnace and the redundancy fund have reignited the debate between unions and politicians, who have long been engaged in a debate over a programme agreement for AST and an industrial plan for the steel industry. Fim-Cisl national secretary Valerio D’Alo calls on the government to ‘intervene to reduce costs and make the national steel industry competitive’.

As GMK Center reported earlier, Italian Arvedi AST made a profit of €187 million in the 2021/2022 financial year. The company’s turnover in the period under review was €3.2 billion. Compared to the previous fiscal year, AST faced an increase in electricity and natural gas costs, which rose by 166% and 245%, respectively. According to its financial statements, AST recorded almost stable stainless steel supplies in FY 2021/2022.