JSW Steel Italy May Stop Wire And SBQ Production In June

According to market sources, due to the lack of semi-finished raw materials and orders, Italian longs producer JSWSteel Italy (former Aferpi plant) will be forced to stop its wire and SBQ production. Due to shortage of billets and insufficient orders, the wire rod mill may be discontinued in June.

According to a previous local trader, the company's existing semi-finished raw materials will be supplied until the end of May, after which the company will stop production of wire rod mills. In addition, due to lack of orders, the SBQ production line may also be discontinued. For some time, JSW Steel Italy has been facing the problem of purchasing semi-finished products. Due to JSW's lack of billet production capacity in Italy, the factory needs to purchase semi-finished billets from other Italian steel producers or import them from JSW India or Oman factories.

A trader said the low carbon wire market has been very sluggish in the past few months. However, benefiting from the order of the Italian national railway company, JSW Steel Italy was able to ensure the stable operation of its rail factory. After acquiring the long products manufacturer based in Piombino in July 2018, JSW has been undergoing business restructuring to increase market share. The company plans to build a new steel-making plant based on electric arc furnaces to start production of billets by 2022.

However, unfavorable market conditions have affected the implementation of the plan even before the new coronary pneumonia epidemic crisis. At the same time, JSW Steel Italy failed to make a profit as previously expected. Its EBITDA for the fiscal year 2019-2020 (as of March 31, 2020) was a loss of 31.91 million euros. The production and sales volume of the Piombino plant has increased, from 195,926 tons to 512,432 tons, and sales from 147,426 tons to 516,608 tons, but according to previous reports, the increase in production and sales was mainly due to the low base of the previous year.

JSW Steel Italia’s operating equipment includes rail rolling mills with a capacity of 350,000 tons/year (restarted in August 2018), wire rod mills with a capacity of 600,000 tons/year (restarted in November 2018) and bars with a capacity of 400,000 tons/year The rolling mill (restarted in January 2019), but due to the unstable supply of semi-finished products, the mill has repeatedly interrupted production. (Sources:ZGW)