For a number of years problems at Ilva, the largest steelworks in Europe, have been casting shadow over the performance of the whole Italian steel industry. Will an acquisition of Ilva by a consortium led by ArcelorMittal, now in its final stage, be a game changer for the market?
Following multiple reports of environmental and health problems caused by the Taranto plant, in 2013 Ilva was placed under special administration. In 2015 the Italian government took over administration of the business in an attempt to protect jobs, start cleaning up the site and prepare the company for sale. But this also led to a closure of two (and for a short period three) of Ilva's five furnaces, and crude steel production at the plant slipped to just 4.7 million tonnes in 2015. Output recovered to 5.8 million tonnes in 2016, but this still meant that the mill operated only at 50% of installed capacity. As a result of problems with domestic steel production, local demand had to be covered by imports, which increased sharply in 2015.
Traditionally, Italy, together with Spain, are amongst European countries that heavily rely on imports. In Spain net flat steel imports...