In a recent development, Sergio Leite, Vice President of Strategy at Brazilian flats producer Usiminas, revealed the company's contemplation of suspending operations at blast furnace number 1 in its Ipatinga plant located in the southeastern state of Minas Gerais.
Speaking to Valor Econômico, Leite highlighted that the potential suspension might be implemented in 2023. This decision stems from a decline in domestic sales, attributed to a surge in steel product imports throughout the year, particularly from China, at prices considered to be below fair market value.
This announcement coincides with Usiminas' preparations for the imminent restart of blast furnace number 3 in Ipatinga, which was temporarily idled in April 2023 for extensive refurbishments incurring an estimated cost of $540 million.
Usiminas has aligned its stance with industry peers Gerdau and ArcelorMittal in urging authorities to consider imposing a 25 percent import tax on steel products. This proposed measure is seen as an alternative to curb the competitive edge of imported products flooding the market.
However, the push for an import tax faces resistance from representatives of 21 industrial sectors, major consumers of steel products, who argue against a 25 percent import tax. Their concern is that such a tax hike could lead to an increase in domestic prices, subsequently diminishing the competitiveness of the local industry. This divergence of opinions within the industry adds complexity to the ongoing discussions surrounding the potential measures to address the challenges posed by the influx of imported steel products.
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Vietnam Steel by Hoa Sen Group
