Union: Chile’s CAP boosts steel production on rising demand

A worker union president reported Wednesday that Compania de Acero del Pacifico (CAP), Chile’s largest steelmaker and iron ore producer, has increased steel production due to an improved local demand.

CAP’s union president, Héctor Medina, said that the companies customers have depleted their inventories and have started buying steel once again, and the company has increased production in turn.

He further explained that over the last month CAP has increased its operating capacity from 50 percent to 70 percent, with two blast furnaces now in operation. He also acknowledged that the upward trend might only be temporary as without a solid US recovery, despite China’s positive performance of late, the situation in Chile may not recover fully.

Concerning prices, Mr. Medina said they’ve slightly increased but are still very far from the ones seen previous to the crisis. “We do not foresee a recovery in the industry soon, but a recovery towards the second half of 2010,” he added.

Longs steel prices in Chile are currently at about $550/mt, up from about $500/mt a few months ago, according to Mr. Medina.