* Jan. 20 deadline set for expressions of interest in assets
* Piombino blast furnace slated for closure after sale
* Lucchini seeking govt approval to sell Trieste unit
By Maytaal Angel
LONDON, Jan 10 Duferco, the world's biggest steel trader, is looking at acquiring some of the assets of troubled Italian steelmaker Lucchini as Italy's government ramps up efforts to protect jobs in the steel sector.
Antonio Gozzi, chief executive officer of the Swiss-based company which both trades and produces steel, said that Duferco together with Italian steelmakers Acciaierie Venete and Feralpi had confirmed an interest in Lucchini's assets.
He added, however: "We are also very prudent. It's a tough situation, because there's big overcapacity in Europe."
Lucchini, Italy's second-largest producer, fell victim to recession and was placed under "special administration" late in 2012.
Piero Nardi, the government-appointed administrator, has set a Jan. 20 deadline for potential bidders to submit expressions of interest for all or part of Lucchini's assets in Piombino and Lecco.
Steel output at Piombino, Lucchini's main production site, declined dramatically last year. Media have reported that workers are on a contract under which they work fewer hours to ensure work for all.
But Piombino's blast furnace is unlikely to continue running after a sale. Nardi has said he is willing to accept offers that do not include the furnace, though the buyer must commit to build an electric arc furnace, which tends to be smaller and can be switched off and on with relative ease.
"For me the blast furnace route is finished in Piombino," Duferco's Gozzi said.
Another industry source said Lucchini was set to close the blast furnace. Lecco is a smaller facility without a furnace.
"If there is a buyer, we'll ask him if there is the intention of keeping the blast furnace running. Nardi is saying the blast furnace must be closed because it does not have raw materials anymore. We are producing 2,300 tonnes of liquid pig iron a day versus full capacity of 6,000 tonnes," said Mirko Lami, of Italian union CGIL FIOM.
IRON ORE, COKE SALE?
Separately, Lucchini has begun to seek government approval for the sale of its pig iron and coke plant in Trieste, where hundreds of workers face job losses if a sale does not go through.
Italian steelmaker Arvedi is widely expected to bid after its attempt to rent the plant fell through. Nardi is likely to call for expressions of interest in the Trieste assets in about a month's time, company officials said.
"We've started talks with the ministry and are working on a formal solution to start the sale procedure. Arvedi is interested. We think there are all the conditions in place for a sale, but we need to start with a public offer," Francesco Semino, general secretary of Lucchini, said.
A spokesperson for Arvedi declined to comment.
Producing steel profitably has become difficult in Europe, where demand is down some 30 percent since the 2008 financial crisis, overcapacity is at around 30-40 million tonnes and prices are near 3-1/2 year lows .HRC-NED=SI.
The problem is particularly acute for Italy, Europe's second-largest steel producer, where the pig iron, steel and related industries account for about 4 percent of GDP.
"Arvedi showed interest in Lucchini's blast furnace in Trieste. If their interest does not go ahead, the administrator will probably shut it down," said Antonio Gozzi, leader of Italian steel association Federacciai.
Before Lucchini entered into special administration, its owner - Russian steel producer Severstal - had tried for a few years to sell the group.
The Trieste plant employs about 485 people and can produce about 500,000 tonnes of pig iron and also coke, part of which goes to Lucchini's main Piombino facility for processing into steel. (Additional reporting by Silvia Antonioli and Clara Denina; Editing by Veronica Brown and Jane Baird)