Italy is currently experiencing severe disruptions linked to truck driver strikes, which are putting pressure on the distribution of goods and fuel. The risks could also extend to the steel industry, affecting delivery schedules, vehicle availability and the cost of material delivered to customers. These difficulties are compounded by production uncertainty at the former Ilva plant in Taranto, where the strike ended on October 16, although discussions between the government and trade unions appear to be continuing.
Logistics crisis compounded by industrial difficulties
Logistic difficulties are not a new issue for European steel market participants, which have been complaining for several months about delays, vehicle shortages, inadequate roads and infrastructure, and high costs. In Italy, discontent has resulted in strikes, protests and road blockades, mainly concentrated in the southern part of the country. This is not a nationwide mobilization, but rather a series of local stoppages, actions by independent committees and individual picket lines.
According to local media reports, the Sicilian Truck Drivers' Committee called for vehicles to be stopped from October 16 until October 20, announcing that its members would not move their vehicles at Sicily's ports. “The trucks and heavy vehicles belonging to members of the Sicilian Truck Drivers' Committee are stationary at ports, where they are not unloading ships, nor delivering at company yards,” Rai News reported.
Numerous picket lines have also been set up at the entrances to major roads and highways in Calabria, Puglia and Campania.
Protests over high fuel prices and cost pressure
High fuel prices are one of the explicit reasons for the protests. According to Rai News, diesel costs for truck drivers have reportedly risen by €0.35/L compared to February this year.
Furthermore, the transportation of goods, including fuel itself, has become increasingly difficult due to the protests, with numerous gas stations in southern Italy running out of fuel. The strikes by former Ilva workers have also contributed to this situation, as their protest actions included blocking the state road near the entrance of Italian multinational energy company Eni's Taranto refinery until October 16.
Former Ilva: reasons for the dispute and status of the plants
On October 12, the main Italian trade unions began a mobilization involving employees of Acciaierie d'Italia (former Ilva), as well as contractors and service workers. The following day, they called a further 48-hour strike due to the lack of adequate responses from the government. Then, on October 15, Uilm, the Italian Metalworkers' Union, confirmed that a meeting had been scheduled at Chigi Palace, the seat of the council of ministers, for October 27, calling for guarantees regarding employment, environmental protection and industrial operations, as well as a clear decarbonization strategy.
As already reported by SteelOrbis, the Supreme Court of Cassation in Milan ordered the shutdown of the hot-end facilities at the Taranto plant in mid-September for health reasons. However, according to reports today, when the hearing scheduled by the Court of Cassation on the matter took place, the Prosecutor General's Office at the Court of Cassation only partially accepted the appeals filed by Acciaierie d'Italia in Amministrazione Straordinaria (ADI in AS) and will announce its final decision on the shutdown at a later date.
Meanwhile, the former Ilva plants in Novi Ligure and Genoa may continue production. The strike by workers at the Genoa plant, which also involved a blockade at Genoa Airport, ended yesterday, October 19, following confirmation of the aforementioned meeting at Chigi Palace on October 27.
Potential impact on steel deliveries and supplies
Although the logistics disruptions are well documented, their precise impact on the steel industry has yet to be assessed. So far, no specific blockages of steel cargoes, delays or order cancellations attributable to the protests have been reported.
Nevertheless, three main areas of risk can be identified:
Less predictable deliveries. Picket lines and blocked access routes may result in missed loading and unloading appointments, requiring deliveries to be rescheduled even when material is available.
Disruptions to supplies. For scrap, semi-finished products and finished steel products transported by road, route interruptions may create a gap between the physical availability of material and its actual availability at the customer's premises.
Higher costs per trip. Waiting times, diversions, vehicle repositioning and refueling difficulties may increase logistics costs per metric ton delivered.
For distributors and service centers, vulnerability mainly depends on usable inventory levels and the possibility of replacing a delivery. In addition, higher transportation costs may be reflected in prices delivered to customers without necessarily affecting ex-works prices.
Short-term outlook
In the short term, the normalization of the scenario will depend on the effective removal of the picket lines, the restoration of fuel supplies and the implementation of government commitments. As for the former Ilva, the key developments will be the outcome of the proceedings of the Supreme Court of Cassation in Milan and the October 27 discussions on the company's industrial and employment prospects.
For steel market participants, the main risks are reduced reliability of delivery times and upward pressure on the cost of material actually received. However, it is still too early to identify a possible widespread increase in prices linked to these issues.
