Commenting on the case of Taranto-based Italian steel producer Ilva, Antonio Gozzi, president of the Italian iron and steel association Federacciai, has stated, "If Ilva should close down, the first ones to take advantage of this situation would be naturally the European producers, but the situation would benefit also the giants in the emerging markets even though the euro-dollar exchange rate is currently not profitable for buyers in the euro zone".
In the interview given to Italian financial newspaper Il Sole 24 Ore, Mr. Gozzi said "There is a difference between buying on euro basis at Taranto or in the rest of the euro zone and buying in dollars from the Chinese or Koreans."
According to the estimates of Federacciai, steel supplies from outside Italy would cost an additional €50-100/mt, which would represent an extra €2.5-5 billion on a national level in the event of a particularly negative scenario. In addition, the loss of production of Taranto would also have a secondary impact, that is an additional cost related to the reduction of steel exports, estimated in the range of €1.2-2 billion depending on market conditions. The total amount of the extra costs, according to Mr. Gozzi, would thus be in the range of €4.5-7 billion per year.
Federacciai president Gozzi went on to state, "There are other continental operators, not to mention those in the emerging markets, which have environmental problems much more serious than Ilva’s. The company is at the forefront in Europe in terms of emissions and environmental investments".
According to data from Federacciai, in 2011 Ilva’s output in Taranto reached 8 million mt (operating at about 80 percent of production capacity), with 3 million mt exported. The other major Italian producer of flat steel products, i.e., Arvedi, would not be able to compensate to a significant degree for the absence of Ilva’s output because, with a capacity of 2.5 million mt, it would only be able to increase its output by approximately 500,000 mt. The rest of the market’s needs would inevitably be met by European producers such as ArcelorMittal, ThyssenKrupp and Tata Steel Europe, and by producers in Russia, China, India and South Korea.