The Argentinian iron and steel institute, IAS, which provides technical assistance and information for the local steel industry, isn’t expecting the segment’s outlook to worsen further, despite the challenges seen so far by the local industry.
Talking to SteelOrbis in the sidelines of the Alacero conference, held this week in the city of Buenos Aires, Argentina, the institute’s technical director, engineer Héctor Sbuttoni, said the segment’s is unlikely to worsen anymore, and should remain stable.
“I see the segment’s current scenario with caution. Having an election race and up-coming change of government make expectancies increase. It’s one more ingredient to be added to the segment’s current scenario,” he said.
“Local steelmakers aren’t planning large investments; by the other hand, they aren’t either planning further cuts in production. They’re just waiting for the right moment. They’re keeping their operations with what they have, with what they do, and see what’s going to happen in 2016,” the executive said.
Sbuttoni said most CEOs are cautious regarding the year to come, but he pointed out “there are many hopes in the domestic market, as a new government is expected to take place.”
He mentioned that despite the challenges, projects like the building of a new production plant in the city of Perez. The project owned by Gerdau and being built by its local subsidiary, Sipar, has so far remained in the company’s pipeline.
“The most important thing is that the project continues,” Sbuttoni said. “Maybe the project’s rhythm may decline, but it’s important that it continues.”
As for the on-going temporary layoffs that took place at Argentina’s Tenaris Siderca, which extended provisional layoffs to avoid job cuts, Sbuttoni thanked the fact that “jobs weren’t lost.”
“We hope the segment’s situation doesn’t worsen further.”
“Regarding Siderar, we can say it’s important they keep their production volumes,” he said, considering the fact Siderar increased output at a blast furnace as a way to compensate the halt in another furnace.
Other aspect mentioned by Sbuttoni is that “it’s in the crisis that people tend to seek more advice and improve abilities by investing in its own workforce”, so mills can endure hard times. “Maybe in other moment of high production volumes, such an effort wouldn’t take place.”
The IAS director said the sector will look with attention at the impacts the new government will bring to sector, as some of the nation’s economic metrics are seen as “not that precise.”
“We’re not in a real economy. We hope the new economic numbers be revealed, so we can see the real situation of the country. The optimism will depend on what will happen with a change in politics.”