Hot-rolled coil buyers fear a supply squeeze as Acciaierie d’Italia (ADI) prepares to halt production entirely following a recent ruling by Italy’s Supreme Court, Kallanish reports.
Last week, Italy’s Supreme Court rejected an appeal by ADI’s special commissioners against the suspension of operations at the steelworks’ hot end in Taranto. The court cited a “serious and significant” health threat.
The ruling, seen by Kallanish, upheld a decision issued by the Milan Court of Appeal in July.
One buyer said it had ADI process its slabs and that the process had so far gone relatively smoothly. However, delivery delays that buyers of Taranto coil have faced for a long time are likely to continue: ADI is cutting staff following the Supreme Court ruling. Several senior managers have reportedly lost their jobs.
Sources close to the company doubt that a letter of interest submitted by a group of Italian steelmakers will lead to a binding offer to buy the Taranto plant and the company’s facilities in the north of the country. “There are too many participants in the group, including long steel producers, who will never be able to come up with an agreed plan that takes everyone’s interests into account,” one source said.
The government is reportedly considering taking a minority stake in a new company that would operate the Taranto plant and continues to negotiate with Jindal on a new binding offer. None of the sources familiar with the situation believes a decision on the plant and the fate of its 10,000 workers is imminent.
ADI’s shutdown would be a major blow to steel rerollers and steel service centers, another major coil buyer said. The Carbon Border Adjustment Mechanism (CBAM) and the new quota system are significantly restricting import options, making buyers increasingly dependent on European producers.
“One major European coil producer is behaving extremely arrogantly on supply, and all EU producers are very firm on raising prices,” the buyer said. Large companies continue to buy steel from abroad, but smaller buyers expect supply to be limited in 2027.
The Supreme Court heard the case on October 20 and postponed its ruling before rejecting ADI’s appeal. Blast Furnace No. 2—the only one still operating in Taranto—stopped producing pig iron in early October after ADI ran out of raw materials. An earlier ruling had allowed the special commissioners to keep the hot end operational pending the Supreme Court’s decision.
ADI’s special commissioners asked the government to increase the number of workers placed on temporary layoff from 4,450 to 8,622—nearly the company’s entire workforce. The measure is due to remain in force until February. ADI directly employs about 10,000 people.
Author: Natalia Capra France
