Latin American furnaces burning brighter in 2021

South American steelmakers produced 26.4 million metric tons of steel in the first seven months of 2021, representing a 26.3 percent increase compared with the same time frame in 2020, when COVID-19 restrictions were widely in force.

Brazil, the continent’s leading steelmaker, has demonstrated a similar pattern of increased output, despite its status as one of the most COVID-wracked nations in South America. Despite its health woes, steelmakers in Brazil produced 22 more steel in the first seven months of 2021 compared with the same period in 2020.

The 3 million metric tons of steel produced in Brazil this July represents a 22 percent increase from the 2.45 million metric tons produced in July 2019, before COVID-19 began its economic ripple effects.

In South America overall, the 3.8 million metric tons of output this July represents an 18 percent increase compared with the 3.22 million metric tons made in July 2019.

The resurgence of the steel sector has been accompanied by announced furnace restarts and capacity expansions from steelmakers in Latin America.

In early June, Mexico-based steelmaker SIMEC disclosed that it plans to double the capacity at its scrap-fed electric arc furnace (EAF) rebar mill in Pindamonhangaba, Brazil. S&P Global Platts, citing a Simec announcement, reported the EAF mill there will expand from capacity of 500,000 metric tons per year to 1 million metric tons.

The plant, operated by the GV do Brasil Simec subsidiary, produces “rebar and rebar coils,” according to S&P. Some $300 million will be invested by Simec to install new EAF technology and a new rolling mill.

In late April, Brazil-based Gerdau announced its intention to restart an EAF mill in Guaíra, Brazil, in the second half of this year because of “the positive scenario for steel demand” in the region.

In neighboring Peru, EAF steelmaker Aceros Arequipa in April announced signing a contract with Germany-based SMS Group for a new vacuum tank degasser to its mill in Pisco, Peru.

The degasser will be integrated into an already delivered SMS Group melt shop and enable the Peruvian steelmaker to widen its production in terms of quantity and quality, according to SMS.

Aceros Arequipa also made a move to strengthen its access to North American ferrous scrap feedstock. In July, the company agreed to purchase an auto shredder yard in Florida formerly operated by Topsham, Maine-based Grimmel Industries.

At the time of that purchase, Aceros Arequipa Strategic Sourcing Manager Diego Arróspide Benavides told Recycling Today, “The new furnace requires almost 400,000 tons per year or more, so we must assure the volume." He added that “100 percent of the ferrous scrap will be shipped to Pisco" from Florida.