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

David Schollaert is a senior analyst for Steel Market Update. David joined SMU after more than a decade in the metals and mining industry in a myriad of different roles. Much of his early experience and expertise were within the coverage and analysis of steel-making raw materials and served previously as senior editor of the CRU Prices Service. Most recently, however, before his return to market analysis, David held roles as a metals buyer and an operations manager for raw material suppliers. Based in CRU’s Pittsburgh office, David can be reached at david@steelmarketupdate.com or 724-720-1008.

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