Economy
Brazil’s Usiminas to Restart Idled Blast Furnace in Late Q2
Written by David Schollaert
April 13, 2021
Usinas Siderurgicas de Minas Gerais (Usiminas) is set to bring an idled blast furnace back online in June at their Ipatinga plant in Brazil’s southeastern state of Minas Gerais, according to Steel Market Update sources. Back in April 2020, Usiminas idled the #1 and #2 blast furnaces due to lower demand resulting from widespread closures and mitigation efforts to counter the spread of COVID-19.
Usiminas, one of the largest flat steel producers in Latin America with an annual capacity of 9.5 million metric tons, originally brought their #1 blast furnace back online this past August, and recent intel confirms they are restarting their #2 blast furnace this coming June. Usiminas did not immediately respond or offer comment.
Both furnaces have an annual capacity of 1 million metric tons each, and the added furnace should provide further slab volumes and a much needed lift to their Cubatão rerolling facility in Brazil’s southeastern state of São Paulo. This is a positive sign to both the Brazilian and U.S. domestic steel industries alike, as Usiminas produces nearly 30% of total steel output in Brazil.
The potential for added Brazilian slab availability is a welcomed development for a U.S. marketplace that has been burdened by pent-up demand, limited supply, extended lead times, and historically high domestic prices. But relief may be limited. Regardless of how much added slab may be produced at Usiminas or make its way onto U.S. soil, quota restrictions will remain the restrictive factor.
Under Section 232, the annual quota for Brazilian slab in 2021 is 3.5 million metric tons. Through the first quarter of 2021, nearly a third of the annual quota was met. Imported slab from Brazil totaled 979,313.90 metric tons through March, and preliminary license data for just the first week of April indicates that Q2’s quota is filling quickly, as it’s already at 179,958.3 metric tons.
By David Schollaert, David@SteelMarketUpdate.com
David Schollaert
Read more from David SchollaertLatest in Economy
SMU Community Chat: Tariff-induced panic purchases, inflation, and calculating costs
Chief executive of the Institute for Supply Management (ISM), Tom Derry highlighted how reactive buying behavior has shifted the market into a quiet demand period. Derry presented ISM data during the weekly SMU community chat.
Architecture billings still sluggish despite project inquiry uptick
The Architecture Billings Index (ABI), a leading indicator for non-residential construction activity, declined for an eighth straight month in June.
Beige Book: Tariff pressures mount, flat outlook
All districts reported “experiencing modest to pronounced input cost pressures related to tariffs, especially for raw materials used in manufacturing and construction.”
Steel exports recovered in May but still historically low
US steel exports rose 10% from April to May but remained low compared to recent years. This came just one month after exports fell to the lowest level recorded in nearly five years.
AISI: Raw steel production ticks up near recent high
The volume of raw steel produced by US mills inched higher last week, according to the American Iron and Steel Institute (AISI). After steadily increasing in April and May, domestic mill output stabilized in early June and has remained historically strong since.