High electricity prices and low demand for steel forced the company to shut down two furnaces in Cremona and one in Terni
Arvedi, one of the largest flat steel producer in Italy, stopped three of the four electric arc furnaces (EAFs) at two Italian plants. The reasons for this step are high electricity prices and low demand for finished products. Eurometal reports about it.
From September 19, 2022, the company will temporarily stop production on EAF No. 1 and EAF No. 2 at the plant in Cremona. Their total capacity reaches 4 million tons of steel per year. At the same time, on September 12, the plant resumed the operation of the furnaces after a one-week stoppage and 4-week maintenance in the summer.
Also, Arvedi decided to stop one of the two EAFs and cold lines at its plant in Terni for two weeks from September 16. The capacity of the two units reaches about 1.1 million tons of steel per year.
“The fact that Arvedi is halting three out of four its EAFs for few days has really shown the doldrum of the market,” said a representative of one of the largest Italian service centers.
Steel producers across Europe are cutting output to support prices. Distributors and service centers hope that the reduction in supply will help balance demand and stabilize the margins of steel companies.
Earlier, GMK Center reported, that European steelmakers are massively reducing or stopping production against the background of rising electricity tariffs. At the same time, the European market is filled with imported steel products, which attract consumers by lower prices than local ones. Countries that supply cheap steel to the EU market do not pay emissions taxes and receive cheaper electricity than European producers. Because of this, the demand for European rolled steel fell, and production costs rose sharply.
The leading steel producer ArcelorMittal has temporarily stopped or announced the stoppage of about 7 million tons of the corporation’s annual capacity across Europe. Today, two blast furnaces at the plant in Dunkirk are stopped. From October, the furnaces in Bremen (Germany), Hamburg and Asturias will be also stopped. Also the company postponed the launch of one of the blast furnaces at the Acería Compacta de Bizkaia plant in Spain.
Steel distributors and service centers in Europe are urging producers to continue cutting production capacity until the market returns to balance between supply and demand.