L'Italian steel industry has historically held a significant role in the European and international context, emerging as one of the major steel producers of the continent since the post-war period. With a strong technological base and consolidated competitiveness on global markets, the sector has achieved significant goals, especially in terms of environmental sustainability. However, today it is faced with new challenges, accelerated by geopolitical changes and from the ambitious European policies for energy transition. These themes are at the heart of the new study edited by Sectoral Strategies and Impact Directorate of Cdp, by title "The Italian steel industry between national and European challenges: what are the development prospects?”, which thoroughly analyses the structure of the Italian steel sector, exploring potential, difficulties and solutions for a competitive and sustainable future.
The current situation: between strengths and weaknesses
Italy is the Europe's second largest steelmaking power, immediately after Germany, and is in eleventh place globally. One of the distinctive features of Italian production is the use of ovens electrical, which mainly use scrap iron. Over 85% of national production comes from this source, thus reducing the environmental impact of the sector and making Italy an example of sustainability in the steel industry.
On the demand side, Italy plays an important role, being the second largest steel consumer in Europe, with strategic sectors such as construction, automotive, energy and industrial machinery that fuel the demand. Furthermore, Italy stands out for its efficiency in recycling: it is first in Europe for the recovery of ferrous scrap and among the main world producers with the lowest intensity of CO2 emissions per ton of steel produced.
Despite these strengths, the Italian steel industry has to deal with some critical issues. The main one, according to the study by the company in via Goito, is the integral cycle crisis (iron ore steel production), linked to the decline in operations at Acciaierie d'Italia in Taranto, the country's leading producer of flat products. This contraction has led to a reduction in the production of flat products, which are crucial for sectors such as mechanics, transport and household appliances. Insufficient production at other electric furnace plants has failed to compensate for the volumes and specifications needed. In addition, the sector is suffering from shortage of ferrous scrap, the demand for which will grow significantly in the coming years in Europe, and higher energy costs compared to the main international competitors. These factors constitute obstacles that are not easy to overcome, but which do not completely preclude the future.
International challenges and future opportunities for the Italian steel industry
At European level, the sector is also facing the global production overcapacity, largely determined by the steel giants Chinese e Indians, And the protectionist policies of the United States, introduced in 2018, which penalize European industries. These phenomena are among the causes of the underutilization of European plants and the decline in profitability. Furthermore, the introduction of EU climate policies, such as the Carbon Border Adjustment Mechanism (CBAM) and the reform of the Emissions Trading System (ETS), could increase costs for the supply chain.
However, not all is lost: Italy still has numerous opportunities to relaunch the steel industry, provided that it adopts a clear and targeted strategy. First of all, it is essential to accelerate the plan for reboot of the establishment of Italian Steelworks in Taranto, a strategic garrison for the national industry, thanks to its technology, volumes and product type. Furthermore, it is necessary to evaluate relaunch plans for steel hubs in other areas of the country, equipping them with cutting-edge plants. However, it is important to prevent the collateral effects of these interventions, which could create competitive displacements with plants already operating in the production of the same products, but not beneficiaries of public subsidies. An increase in production capacity could also further destabilize the scrap market, already tense due to growing demand.
Cdp solutions
According to the CDP study, one of the solutions to relaunch the Italian steel sector involves strengthening industrial and trade policies, through cooperation between the EU and the United States to address global overcapacity and promote the adoption of higher environmental standards, protecting European competitiveness. Another crucial aspect will be the strengthening of the national production capacity, modernizing the main steel plants and avoiding risks of market destabilization.
Furthermore, the ecological transition e digital represents a great opportunity for the sector. Measures such as energy efficiency, the use of alternative technologies (such as green hydrogen) and the introduction of digital solutions, from advanced sensors to artificial intelligence and digital twins, are essential to ensure the competitiveness of the Italian steel industry.
Finally, a further step forward could come from the Global Arrangement on Sustainable Steel and Aluminum (Gassa), an agreement under negotiation that could resolve international trade tensions, particularly those with the United States, and establish a common approach for the evolution of the global steel industry.
