In the context of the current global financial crisis, major steel companies all over the world are cutting their production in order to minimize the negative consequences of falling international steel demand and prices.
Plans to roll back steel production have also spread to Italy as the leading mills in the country such as Alfa Acciai S.p.A., Feralpi S.p.A., Ferriera Valsabbia S.p.A., Ferrosider S.p.A. Leali S.p.A., Iro SpA. and Metalgoi Siderurgica S.p.A. have already rolled back their steel production in late September and early October for periods of one or two weeks, due to sagging enquiries and sales from both domestic and international customers. Meanwhile, Ori Martin is also still considering halting production.
Duferdofin has also announced that it will stop operations during the period between October 23 and November 3.
One Italian steel market insider commented to SteelOrbis that the global weakness in steel demand has caused most of Italy's export markets to close and this has led to an oversupply of steel products in the domestic market. This is the main reason behind Italian steel producers' decision to stop production for the time being.
Reports from Italy indicate that the warehouses of producers are full, while stock levels at distributors are running at minimum levels.
On the issue of production stoppages, Federacciai president Giuseppe Pasini says it is not possible to say with certainty how long the production cuts will last, whereas Amato Stabiumi from Alfa Acciai says they will go ahead and suspend production until the market touches the bottom and starts recovering again.