International Steel Mills
Usiminas to Buy Slabs to Offset Lengthy Blast Furnace Outage
Written by Michael Cowden
October 6, 2021
Usinas Siderúrgicas de Minas Gerais S.A. (USIMINAS) will take a lengthy, unplanned outage – 90-150 days – at the No. 2 blast furnace at its Ipatinga Plant in Brazil’s Minas Gerais state.
The Brazilian steelmaker said it would minimize the impact on customers in part by buying slabs on the open market to make up for lower steel output from the facility.
USIMINAS said the outage was necessary because of an “incident” on the No. 2 furnace’s “great cone” that occurred in late September, leaving the furnace “paralyzed,” according to a filing with Brazilian securities regulators.
The No. 2 furnace can produce approximately 600,000 metric tonnes of pig iron per year. The wide variation in estimated downtime is because of uncertainty around how long repairs will take, the company indicated.
SMU keeps tabs on developments in Brazil because the country has become the largest supplier of steel slabs to the U.S. market in the years since the 2018 implementation of Section 232 tariffs and quotas.
Brazil is subject to a Section 232 quota rather than the 25% tariff that other nations face, which means it has been able to sell lower priced slabs into the domestic market, allowing it to displace tons that had previously been supplied by other countries.
Russia, for example, had been one of the primary foreign suppliers of slabs to the domestic market. But Russia is subject to the 25% tariff rather than a quota, something that has rankled some domestic slab converters.
By Michael Cowden, Michael@SteelMarketUpdate.com
Michael Cowden
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