Italian steelmaker Acciaierie d’Italia has suspended some deliveries of already confirmed orders. Italian steel trade association Assofermet has condemned the decision, saying the motivation for it remains unclear and the steelmaker has not communicated how long this suspension will last.

“There is the strong and historical bond that unites the Taranto steelworks to the distribution and national re-rolling sector, which has always placed this supplier at the top position in terms of importance for large-volume procurement … The consequences of the producer’s decision are dramatic as many players will not be able to absorb the price increases on contracts already concluded and will not be able to use, due to the blocking of deliveries, the volumes that were regularly purchased, with heavy repercussions on the downstream market,” Assofermet steel division president Paolo Sangoi says in a note sent to Kallanish.

Orders were suspended without a warning to customers. The move however seems to be unrelated to the energy surcharge implemented by the steelmaker last month on all contracts agreed before 10 March, Sangoi says.

The suspended deliveries are exacerbating the steel shortage caused by the Ukraine war and EU import restrictions. Furthermore, Italian steel production has been reduced drastically due to skyrocketing energy costs, the association points out, adding it has requested an urgent meeting with the management of Acciaierie d’Italia to clarify the situation.

The steelmaker is implementing an energy surcharge on contracts already agreed. The surcharge will be calculated based on the average between the gas price at the time of the order and the gas price at the time of production and shipping. Considering the move unfair, Assofermet asked the producer last month to immediately withdraw the plan. Many service centres decided not to pay the surcharge and have involved lawyers (see Kallanish passim).

Acciaierie d’Italia declined to comment.