Brazilian steel industry

The Brazilian Steel Industry is Actively Expanding Its Growth Rolling Capacity

The industry’s expectations for the Brazilian steel industry in 2023 are quite pessimistic, so the relevant forecast data is lowered. According to the Brazilian Iron and Steel Association (IABr), the country’s steel consumption is expected to decline in 2023, mainly due to the deterioration of the steel industry performance in the second quarter, as well as the recent uncertainty of the recovery of downstream industries such as automobiles, capital goods and civil construction, which account for about 82.5% of total steel demand. According to the new forecast, in the whole year of 2023, Brazil’s apparent steel consumption will fall by 2.6% year-on-year to 22.9 million tons, crude steel production will fall by 5% year-on-year to 32.4 million tons, and domestic sales will fall by 6% year-on-year to 19.12 million tons. In April 2023, IABr predicted that in 2023 Brazil’s crude steel production would increase by 2% year-on-year, domestic sales by 0.7% year-on-year, and apparent consumption by 1% year-on-year.

It is reported that in the first half of 2023, Brazil’s crude steel production totaled 15.972 million tons, down 8.9% year-on-year; Domestic sales volume was 9.626 million tons, down 5.7% year-on-year; Apparent consumption was 11.557 million tons, down 1.6% year-on-year.

Worldsteel said that in order for the steel industry to enter a sustainable growth cycle, there is an urgent need to improve Brazil’s competitiveness, as the performance of the steel industry is a leading indicator of gross domestic product. For 2024, IABr forecasts that Brazilian steel consumption will increase by 3% year-on-year compared to 2023 results.

On the other hand, in order to better respond to the growing market demand, Brazilian steel producers will continue to invest in new growth material rolling capacity and continuously improve production capacity. Relevant data show that within two years, Brazil’s steel production capacity may increase by 3 million tons/year, while increasing the production of high value-added long materials.

The AcoCearense Group is committed to expanding the long-wood rolling capacity of its subsidiary SideruricaNorteBrasil (Sinobras), with plans to increase production to 880,000 tons per year. The producer has built a 500,000-ton/year bar plant in Malaba, as well as a 230-kilovolt transmission line to meet its growing electricity demand, while using electricity supplied by the Belo Monte hydroelectric plant. The total investment of the project is approximately $190 million, and the unit will be launched in the second half of 2023.

GrupoSIMEC is about to complete the construction of a 500,000-ton/year commercial bar plant in Brazil. The plant is located near GrupoSIMEC’s Cariacica plant in Espirito Santo and is designed and supplied by the Simak Group. After commissioning in 2023, the plant will increase GrupoSIMEC’s overall rolling capacity to 950,000 tons per year. The project is part of the Cariacica plant expansion plan (total investment of $313 million). In addition, the expansion plan also includes the upgrading of the smelting plant, with the long-term goal of producing some special steel grades.

At the same time, GrupoSIMEC has also initiated the expansion of its PinDamonangaba plant in Sao Paulo, with the goal of doubling its steelmaking and rolling capacity. After a year of preparatory work, the foundation stone of the new rolling mill was laid in late June 2023. With the investment, GrupoSIMEC will reach 1 million tons/year of long wood rolling capacity, further consolidating its market position. According to an earlier official announcement, the project is scheduled to be completed in 2024.

Arcelormittal Brazil will install a new longwood mill at its BarraMansa plant, aiming to increase its presence in the Brazilian market for high value-added longwood and thereby improve profitability. The project has authorized Danieli to design and supply a complete 15-stand plateless mill and walking beam heating furnace, which is expected to produce 400,000 tons/year of high-quality bar and medium section steel, mainly including spring plates, Angle steel, channel steel, beams, round steel and square steel. The company’s quarterly report shows that detailed engineering and construction of new buildings are on schedule, while related demolition works have been completed to make way for the construction of the new water treatment plant. The project cost $250 million. The new plant will begin operations in the first half of 2024.

The Gerdo Group plans to build a 500,000-tpa steel mill in 2024 at its Acominas Combined steel plant in OuroBranco, Minas Gerais. The $627 million project aims to provide a wider range of products to meet Brazil’s domestic needs. However, Gerdau did not disclose the current status of the project.

In addition, the Ferroeste Group is considering doubling the long-wood rolling capacity of its AcoVerde plant to 1.2 million tons per year by 2025. The initial project was put on hold in 2019 due to the COVID-19 pandemic, with plans to restart it in 2022. However, with the current focus on decarbonisation options, the project is still waiting.

According to relevant data, after the completion of the above projects, the Brazilian steel industry’s long wood rolling capacity may increase by nearly 20% to about 19 million tons/year.