ArcelorMittal SA expects sales at its long steel products
operation in Brazil to grow by around 4 percent in 2013
following a year of unfulfilled expectations in the
"Brazil has been growing less
than we expected: Everyone talked about a 4-percent lift in
gross domestic product (GDP) for 2012, but the growth was 0.9
percent," Jefferson de Paula, executive vice president and
chief executive officer of ArcelorMittal Long Carbon Americas,
told AMM sister publication Steel First in an
"Our expectancy (for 2013) is
that steel consumption in Brazil will grow by 4 percent and, as
we want to maintain our current market share, were
expecting a 4-percent rise in sales, too," he said.
Brazils economy began to
cool right after de Paula was named head of the Long Carbon
Americas unit in mid-2011.
Local GDP growth was 7.5 percent
in 2010, driven by heavy governmental expenditures and strong
foreign investment. But inflationary pressure pushed that down
to 2.7 percent in 2011, forcing Luxembourg-based ArcelorMittal
to freeze its flagship long steel project in Brazil for a
second time. The $1.2-billion expansion at its Monlevade plant
in Minas Gerais state had been resumed only a year and a half
"The project is still stopped,
but weve been monitoring the market and will resume it
once market conditions improve," de Paula said.
The uncertain outlook for the
global steel market also hasnt encouraged expansion.
"The biggest problem in the
steel industry continues to be (global) oversupply," de Paula
And until general conditions
improve, ArcelorMittals Monlevade expansion, along with
most other long steel projects in Brazil, will likely remain on
hold, he indicated.
But scrap looks to be a bright
spot for ArcelorMittal, which has been investing in scrap
processing equipment in Brazil in a bid to boost its network of
scrap processors, de Paula said.
Meanwhile, Brazilian steel
association IABr late last year called for a ferrous scrap
export tax (
amm.com, Nov. 27), drawing flak from Brazilian
institute of iron and steel scrap companies Inefsa (
amm.com, April 15).
"Im not in favor of closed
economies, but we need to have equal, fair trading conditions,"
de Paula said, noting that in this sense IABrs plan is
for a reciprocity measure.
There isnt enough scrap in
Brazil, so long steel producers also need to buy third-party
merchant pig iron to feed their furnaces, he said.
"Some 30 percent to 36 percent
of our (furnaces) feed is pig iron," de Paula said.
Despite such challenges,
ArcelorMittal Aços Longos Américas has been
operating at high utilization rates, he said, noting that in
Brazil and Mexico, the steelmaker has been working at around 90
percent of installed capacity vs. a rate of some 75 percent in
the United States.
In other countries in the
Americas, rates have been ranging from 80 to 85 percent, with
an average of 86 percent for the entire division, de Paula
A version of this article was first
published by AMM sister publication Steel