A recent survey conducted among steel industry executives at a conference in São Paulo indicates a decline in sector investments. On average, companies are operating with 35 percent idle capacity, primarily due to increased imports, especially from China, which are reportedly priced below market value.
Gerdau, which plans to invest up to $1.12 billion annually in its international operations, is expected to maintain this total investment but reduce the proportion allocated to its Brazilian operations.
Usiminas has adjusted its investment target for the year from up to $300 million down to $260 million, focusing solely on operational improvements.
At Aço Verde Brazil, a manufacturer of long products for the domestic market, plans to increase annual capacity by 30 percent from its current 728,000 mt have been placed on hold. President Silvia Nascimento cited low domestic prices and weakened demand as reasons, with the plant now running at 33 percent idle capacity.
The Brazilian division of ArcelorMittal recently completed an investment cycle, including the acquisition of the Pecem slabs producer. Earlier this year, the company announced plans to invest up to $750 million at its Tubarão plant; however, the viability of this project is now threatened by competition from Chinese imports. Company sources stated that the planned investment may be reconsidered if the volume of imported steel does not decrease.
Meanwhile, Aperam South America, the leading producer of stainless and electric steels in Minas Gerais, has put $110 million in planned investments on hold due to the intensified competition from imported Chinese products.
