June 5, 2012 / 12:26 PM / 6 years ago

UPDATE 2-Italy steel output squeezed by crisis-Federacciai

 * Italy's steel exports seen stable in 2012
 * Italian steel makers seek export duty on scarps

 (Adds more comments, details)	
 By Svetlana Kovalyova	
 MILAN, June 5 (Reuters) - Output by Italy's steel industry,
the second biggest in the European Union after Germany, will
decline this year as the economic crisis bites ever deeper and
is unlikely to return to peak levels any time soon, the head of
Italy's steel industry body said.	
 Steelmakers across Europe are being hit by the economic
decline in the region and euro zone debt crisis which sapped
industrial demand. Italy, the euro-zone third-biggest economy,
has slipped further into recession in the first quarter of 2012.	
 "Production volumes in 2012 not only in Italy, but in (all)
Europe will not reach levels of 2011. The crisis is biting ever
stronger, there is a strong fall in demand," Federacciai new
chairman Antonio Gozzi told a news conference.	
 Italy's steel output rose 11.6 percent to 28.7 million
tonnes in 2011, below 30.6 million tonnes produced in 2008
before the first wave of the global economic crisis hit
industrial demand.	
 "It looks for now that output peaks of 2007-2008 are hardly
reachable ," Gozzi said.	
 Only 70-75 percent of Italy's steel making capacity is
currently used and the sector needs to consolidate, he said.	
 However, steel exports from Italy are expected to stay
around the 12 million tonnes posted last year, helped by a
weaker euro against the U.S. dollar which makes Italian exports
more competitive in "dollar areas", such as North Africa, Gozzi
 "I am more optimistic about exports. The level of exports
should be stable, compensating for a fall in domestic demand,"
he said.	
 In the first quarter, Italy's steel exports rose 9.6 percent
year-on-year to 4.808 million tonnes while imports dropped 29
percent to 3.540 million tonnes with demand from outside the
European Union driving exports. 	
 Italian steelmakers have to pay the highest in European 
electricity prices and import all iron ore that they use which
put them at a competitive disadvantage compared to rivals from
resource-rich countries such as Russia, Ukraine, Brazil and
India, Gozzi said.	
 He said Federacciai, together with the European steel body
Eurofer, is considering requesting the introduction of duties on
exports of scrap steel from Europe on which the local industry
depends for about 60 percent of supplies.	
 "Scraps are the only raw material that we have, our only
mine. We want to protect it. All our competitors protect their
raw materials, protect their scraps," Gozzi said.	
 Russia, for example, has a 15 percent duty of scrap exports,
he said.  	
 European steelmakers need to find an EU country which would
formally present such request to Brussels and they would work on
it in the next few months, he said.	
 Italy's Industry Ministry Undersecretary Claudio De Vincenti
said the government would look into such request but it was too
early to say whether Italy would spearhead such initiative.	
 "We first need to see the proposal and study it well," De
Vincenti told Reuters on the sidelines of Federacciai's annual
 (Reporting by Svetlana Kovalyova; editing by Keiron Henderson
and Sofina Mirza-Reid)	
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