‘Steel industry: the supply chain’s point of view’: Michele Bendotti’s speech on current events and prospects for the steel industry.

High inflation, reshoring, a boom in demand and its subsequent deflation, rising energy costs, and a shortage of raw materials: 2022 is affected by a highly precarious scenario, which has had critical repercussions on the entire steel industry, from the steel mills and scrap dealers to service centers and steel distributors. This was the focus of the webinar “Steel industry: the supply chain’s point of view” organized by siderweb – La community dell’acciaio, also attended by Michele Bendotti, sole director of Forni Industriali Bendotti.

THE CONTEXT – “The progressive increase in energy costs started in 2021, and then the war in Ukraine has severely affected the international and Italian steel industry and, consequently, the plant manufacturers. It is increasingly difficult to understand what is happening, just as it is increasingly difficult to plan for the long term. Unfortunately, the Russian-Ukrainian conflict and the subsequent higher cost increases concern only the European market. In the USA or the Far East, this is not perceived. On a positive note, thanks to Section 232, we are competing for important orders in the US,” Michele Bendotti said.

STOCKS AND PLANNING – In 2021, in a climate of optimism, we have seen an increase in apparent demand in all sectors, not only in the steel industry. “We too have done the same where possible, trying to keep our stocks high and to plan at least 80 percent of our purchases well in advance, to retouch the remaining 20 percent and be able to complete an order,” Michele Bendotti said. “But it is more and more difficult to make long-term plans, which is absolutely in contrast with our business model. We produce furnaces with a very long lead time: it takes no less than 8-10 months from the signing of the contract to the shipment of the furnace, which can become 18 if we consider the start-up of the furnace. To anticipate any event by 18 months nowadays is practically impossible”.

PROSPECTS FOR THE FUTURE – Just like the will for electrification in the automotive sector, the need to reduce the carbon footprint of steel plants is also a distinctly European objective. “Unfortunately, we cannot expect to significantly change the world on our own. I believe converting to endless rolling and induction furnaces is not the final solution because they work well for some products but less for applications such as special steels or thicker products. In the last ten years, many rolling mills such as ORI Martin, Acciaierie di Verona, Duferco, ABS, decided upon a traditional WBF fed by natural gas. Before moving to different business models, it would be essential for me to optimize what we already have, making the most of resources and technologies. Hybrid formulas such as mixtures of hydrometane or biogas can be one way and guarantee good results, as can the possibility of feeding the reheating furnace directly from the CCM (Continuous Casting Machine). The furnace we have built for the Duferco plant in San Zeno (BS), for example, is already set up to be able to hot charge, with a significant reduction in consumption and emissions,” Michele Bendotti said.

FLEXIBILITY – In such an unstable context, “I like to remember that the reheating furnace is the flexible connection between the melt shop and the rolling mill. It is the element that can compensate for any downtime due, for example, to the increasingly frequent peaks in electricity costs, optimizing production according to the melt shop’s charge”.

Author: bendotti