International Steel Mills

Usiminas to Buy Slabs to Offset Lengthy Blast Furnace Outage

Written by Michael Cowden

October 6, 2021

Usinas Siderúrgicas de Minas Gerais S.A. (USIMINAS) will take a lengthy, unplanned outage – 90-150 days – at the No. 2 blast furnace at its Ipatinga Plant in Brazil’s Minas Gerais state.

The Brazilian steelmaker said it would minimize the impact on customers in part by buying slabs on the open market to make up for lower steel output from the facility.

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USIMINAS said the outage was necessary because of an “incident” on the No. 2 furnace’s “great cone” that occurred in late September, leaving the furnace “paralyzed,” according to a filing with Brazilian securities regulators.

The No. 2 furnace can produce approximately 600,000 metric tonnes of pig iron per year. The wide variation in estimated downtime is because of uncertainty around how long repairs will take, the company indicated.

SMU keeps tabs on developments in Brazil because the country has become the largest supplier of steel slabs to the U.S. market in the years since the 2018 implementation of Section 232 tariffs and quotas.

Brazil is subject to a Section 232 quota rather than the 25% tariff that other nations face, which means it has been able to sell lower priced slabs into the domestic market, allowing it to displace tons that had previously been supplied by other countries.

Russia, for example, had been one of the primary foreign suppliers of slabs to the domestic market. But Russia is subject to the 25% tariff rather than a quota, something that has rankled some domestic slab converters.

By Michael Cowden, Michael@SteelMarketUpdate.com

Michael Cowden

Michael Cowden is managing editor for Steel Market Update. Cowden has covered the steel industry since 2007. He specializes in flat-rolled steel but has also reported on steel long products, steel pipe and tube, and aluminum. Before joining SMU, Cowden held reporting jobs at Fastmarkets AMM in Chicago, the Associated Press in Pittsburgh, and the Cambodia Daily in Phnom Penh. He has also worked as a copy editor and in marketing at the University of Chicago Press. Cowden has a BA in English from the University of Chicago and an MSJ journalism from Northwestern University’s Medill School of Journalism. Contact him at michael@steelmarketupdate.com or 724-759-7872.

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