The integrated steel plant ArcelorMittal Tubarao, located in Brazil's Espirito Santo state, has been operating almost at its 7.5 million mt/year full capacity, exporting almost 70% of the output, given a favorable exchange rate and recovery in international prices.
"We are operating at a rate of 7 million mt/year of crude steel," company President Benjamin Baptista Filho said in an interview. He added that all surplus production of steel slabs -- which is above 3 million mt -- has been exported, plus an additional 1.5 million mt of hot-rolled coils.
Tubarao slabs shipments have picked up from July 2014, when the group won a contract to supply part of the needs of the US rolling mill Calvert, in Alabama -- a unit sold by ThyssenKrupp to ArcelorMittal and Nippon Steel & Sumitomo. With this, Tubarao revived a shuttered blast furnace and now produces about 1 million mt of slabs for Calvert. "The remaining has been allocated to new customers and new markets," he said.
Regarding the exports of HRC, the company is seeking to offset the decline in demand in the Brazilian steel market. In the first quarter, the group experienced a decrease of 14% in local sales, according to its latest earnings result.
The Brazilian steel market shrank 35% in the past three years, Baptista said.
"There has to be growth in the economy to pull [steel] consumption," he said, adding that the new government brought enthusiasm to the business.
"With more than two-thirds support in Congress, President Michel Temer may get things approved and done," he said, citing a positive change in expectations.
