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Italy’s Arvedi to temporarily halt EAFs on high energy costs, low demand

Italy’s largest flat steel producer Arvedi is expected to stop production at its mill in Cremona, northern Italy, in the week of Sept. 19 due to high raw materials costs, sources told S&P Global Commodity on the sidelines of the EUROMETAL event in Italy Sept 15.

Arvedi restarted production in the week beginning Sept.12 after a week-long stoppage and previously halted production for four weeks during summer, a source close to the company confirmed to S&P Global.

Arvedi operates two electric arc furnaces, or EAFs, in Cremona, namely EAF No. 1 with production capacity of 1.4 million mt/year of crude steel, and furnace No. 2 with an expanded capacity of 2.6 million mt/year since 2021.

The company has also decided to stop production at one of the two EAFs at its AST Arvedi plant in Terni and other cold lines from Sept. 16 for two weeks, union and market sources confirmed to S&P Global. The two EAFs in Terni have a combined capacity of around 1.1 million mt/year.

An Arvedi spokesperson declined to comment when contacted by S&P Global.

“The fact that Arvedi is halting three out of four its EAFs for few days has really shown the doldrum of the market,” a distributor executive at one of the largest Italian service centers told S&P Global.

Union sources also confirmed that, due to the low demand, Italian flat steel producer Acciaierie d’Italia was working at low capacity utilization with two blast furnaces, BF1 and BF4, running after BF2 was idled in July. These sources said the company is producing 10,000 mt/day of pig iron from the two BFs, compared to the previous 15,000 mt/day.

This was confirmed by Acciairie d’Italia spokesperson to S&P Global.

Steelmakers across Europe are cutting production to sustain prices in moves that steel distributors and service centers hope will continue to rebalance demand and re-stabilize margins, market participants said during the EUROMETAL event.

Platts assessed hot-rolled coil in South Europe down Eur5/mt Sept. 15 to Eur760/mt ex-works Italy, according to S&P Global data.

— Annalisa Villa