Press releases

Special Report: Riva cutting quarter of output in Q4 - 27 October 2011

“Bad times are upon us: the fundamentals are difficult, steel demand is weak. We are cutting our production to balance demand and supply, in line with other European producer.” By cutting output Riva hopes to support current price levels, and push them up in the first quarter as there will be little surplus stock in the system.

On 31 October Riva will stop the No 1 hot strip mill at the Taranto works of its Ilva affiliate for an undetermined period of time. It will work reduced shifts at its pickling and colour-coating lines and may also suspend their production for “some weeks.” Riva is “monitoring the economic situation closely” and at present has no plans to idle blast furnace capacity.

Riva says long products are also suffering, perhaps more than flats. In its longs plants it is currently working at around 65% of capacity.

The Riva Group will produce 14.5m tonnes of crude steel this year, with 8.5mt coming from Ilva, slightly less than the forecast 15mt and 9mt. In 2010 it produced around 14mt, up from 11mt in 2009.

One of the largest iron ore and coal buyers in Europe, Riva expects iron ore prices to fall in Q1 2012. “Calculating the prices based on Vale, BHP and Rio’s methodology is it clear they will go down... I can tell you that, together with some Chinese mills, we have asked Vale to change its methodology,” Riva says. The company wants prices to be based on a more recent period, which will mean costs are more in line with the current market situation.

 

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