From December 24, 2011 to January 18, 2012, Italy-based steel producer Lucchini will keep its blast furnace idle at its plant in Piombino in Tuscany because of lack of orders. Over 2,000 workers will be laid off over this period during which they will receive payment.
This decision results from the ongoing sluggishness of the market. The blast furnace with a production capacity of 2 million mt of crude steel cannot operate below a certain average daily production level as keeping it operational would entail prohibitive costs. In an internal note, Lucchini stated that "the decision is linked to industrial and commercial choices and it is not attributable to the restructuring plan which is currently being finalized."
Lucchini is coming under pressure from two forces: on the one hand, from the global economic crisis, with decreasing steel consumption, while on the other hand it suffers from the uncertainty related to Lucchini's debt restructuring (€770 million), which is affecting the company in terms of availability of funds.