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Italy Steel Output to Hit 25 Million Tonnes in 2010
May 17, 2010

Steel output in Italy is expected to increase by 30% in 2010 due to the restocking of used-up inventories and new demand from automobile and energy industries.

Giuseppe Pasini, chairman of the industry body Federacciai, stated that production of steel in Italy, which is the second largest steel producer in Europe after Germany, is likely to increase 30% to 25 Million Tonnes in 2010, as per the news published by FOREXYARD on May 6, 2010.

In 2009, as the global recession hit industrial demand, country’s steel output declined 35.1% to 19.85 Million Tonnes. In first half of 2009 alone, there was 42% decline in the output that declined to 9.88 Million Tonnes.

Though industrial production appeared to have started a tentative revival since mid-2009, the steel industry was still lagging behind. This indicated that inventories required being further run down before the production resumed sustained growth.

Nevertheless, the demand has started recovering this year, as the industry saw a 30% growth in steel output in the first quarter of the year.

The restocking of exhausted inventories and additional demand from the automotive and energy sectors are expected to drive the growth in coming months. Previously, the government implemented economic stimulus packages and car-scrapping schemes in order to revive the declining economy and slumping steel sector. The industry experts are now confident that steel demand would not be affected by the withdrawal of these schemes and would soon stabilize.

Since the steel industry is considered a barometer of the well-being of the country’s economy, it can be said that these optimistic figures will serve as a major boost for Italy’s economic recovery.

Unfortunately, even after attaining the projected growth in 2010, the steel industry of Italy would still remain below the pre-recession level. Returning back to the previous levels is in fact a long-term phenomenon. This trend will continue for some more years beyond 2010 due to the huge production gap created by the recession.

According to a Research Analyst at RNCOS, “The Italian steel industry may have to encounter the challenge of increased raw material and iron ore prices in the coming times. This will ultimately increase the cost of steel production. And considering the current economic conditions, it will be difficult for steel manufacturers to bear any significant increase in prices.”

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