ArcelorMittal Italia declares force majeure

Steelmaker ArcelorMittal Italia has declared force majeure after an incident earlier this week, which has seen parts of the Taranto plant seized and blast furnaces two and four taken off line for two days.

Following a tragic incident, whereby a worker fell into the sea amid bad weather conditions, unions called strikes. Authorities have since seized pier number 4 for investigation and the company is now "unable to fully operate in the affected areas for the foreseeable future", it said in a letter obtained by Argus.

"To date, we are unable to determine how long this force majeure will continue," ArcelorMittal said.

There were not enough staff to securely operate the machinery yesterday because of the industrial action, called after high winds toppled a crane, dislodging the worker.

But unions are said to have called off the strike and are returning to work, so furnaces two and four will be restarted quickly.

The blast furnace stoppages have impacted 10,000-12,000 t/d of output, market participants said. Buyers are already reporting delays to orders.

ArcelorMittal Italia's current issues have attracted significant attention — ranging from the company's talks with the government over the Crescita Law to a judge ordering the closure of blast furnace two — but the impact on the weak European market has so far been limited.

Mills are on short lead times so buyers are content to hold back and not rush to procure, despite signals from some producers that they will seek price increases for September after the summer holiday period.

The Argus daily Italian hot-rolled coil index was flat at €456.25/t yesterday, at a €19/t discount to the northwest Europe index. The discount for Italian origin coil shrank to as little as €4/t a month ago, when German mills were selling to Italy, a reversal of the typical flow. Italian mills had reacted to rises in import costs and secured increases more quickly than their northern counterparts, after announcements of production cuts and price increases.

Since then the northwest market has been fairly steady, at relatively low price levels, while Italian mills have had to reduce prices because of low lead times and weak demand.