Brazilian integrated steelmaker Gerdau would allegedly benefit from the merger of ArcelorMittal’s Brazilian assets and Votorantim Siderurgia, a media report from Estadao citing Inesfa said this week.
Inesfa, the country’s institute of iron and steel scrap companies, did not immediately respond to a request for comment. Gerdau declined to comment.
The local longs steel market is mainly dominated by Votorantim Siderurgia, ArcelorMittal Brazil, Companhia Siderurgica Nacional (CSN) and Gerdau. CSN and Inesfa have questioned the deal to the nation’s anti-trust authority, Cade, which is expected to announce a decision on the deal by March next year.
Gerdau did not oppose the deal within Cade. If the deal is approved, about 90 percent of the longs market would be owned by the two groups, ArcelorMittal-Votorantim, and Gerdau. Inesfa said this would be a problem because there are currently more scrap producers than buyers.
Cade’s former president, Gesner Oliveira, said the lack of competition in the longs market would strengthen the buying power of these longs producers, reducing scrap prices drastically.