"The Italian steel industry is structurally in good health, but it is experiencing a quite complicated period, both in terms of production volumes, which dropped in the first eight months of the year by 4.4 percent, compared to the same period of the 2018, and in terms of profitability, which was impacted by decreasing prices", said Alessandro Banzato, President of Italian steelmaker association Federacciai during the annual meeting of the association, which was held in Milan on October 14. As reported previously, in the first eight months of 2019, Italian crude steel production amounted to 15.41 million mt, while in August it amounted to 857,000 mt, i.e., 26.6 percent less year on year.
"What worries us,” Mr. Banzato continued “is the great difficulty in which Europe finds itself. Europe has to strike back finding new tools to promote investment and growth”. Banzato also underlined that it is impossible to overlook the problem of overcapacity. He recalled that "the OECD estimates a global excess of steel production of 550 million mt, i.e., more than three times compared to the EU production in 2018". This is a problem that only "Europe which is cohesive, authoritative, dynamic and capable of stimulating investments" can face.
In a press briefing before the annual conference, Mr. Banzato said he believes that 2019 data overall won't be positive for Italian production, also because the last months of the year are traditionally weaker. Therefore, production should keep decreasing year-on-year in the coming months. According to Federacciai's president, this situation is not going to improve in the first months of 2020, while he expects some improvements in the second half of the year, thanks to the fact that buyers will have probably reached very low stock levels by then.
Banzato also said that Brexit will certainly have an impact, "even though we don't know how much that will be". Federacciai will ask for a new revision of EU safeguard once the UK is out of the EU, since "volumes will have changed". Banzato also said that Federacciai will monitor the British Steel situation as the company could benefit of a bigger state aid once UK is not under the control of EU antitrust anymore.