ArcelorMittal will idle next month a 500,000 mt laminator at its long steel mill in the city of Piracicaba, in the state of Sao Paulo, a company’s executive told reporters in the sidelines of the Brazil Steel Congress, which was held from July 12-14 in the city of Sao Paulo.
According to Jefferson de Paula, head of Long Carbon Central and South America at ArcelorMittal, the company is also analyzing the possibility of idling another laminator, as the domestic market for long steel in Brazil isn’t expected to grow in 2015.
ArcelorMittal operates ten laminators in Brazil. In addition to the Piraciba equipment, which will be idled in August, the company also plans to stop using a second set of equipment.
During his presentation at the Steel Congress on Tuesday, Paula said ArcelorMittal would “probably” idle for a period of up to two years a $270 million laminator the company operates at its Joao Monlevade mill in the state of Minas Gerais.
However, just a few minutes later after his statement, the executive told reporters that the company will stop “one more laminator” and that such equipment wouldn’t the be the one in the Joao Monlevade mill.
“This won’t probably be the laminator we will idle, as it is the most modern equipment we have,” he told reporters.
With a capacity to produce 3.6 million mt of long steel in Brazil, ArcelorMittal said it has a glut of 1 million mt of the product. Such an overcapacity will cause the company to idle a 500,000 mt laminator in Piracicaba. The Piracicaba mill has two laminators and the capacity to produce 1 million mt of long steel.
Paula said ArcelorMittal will probably layoff some of its employees at the Piracicaba mill, since the mill’s capacity will be reduced by half.
Regarding long steel exports, the company expects to increase external sales of long products to between 22 and 23 percent by 2016, from 15-16 percent in 2015.
The company has been targeting two different markets for long steel exports. The first includes neighboring countries like Bolivia, Paraguay, Colombia and Peru, while the second targets high-quality consumers in the US, Canada and Asia.