Usiminas to halt Blast Furnace 1 due to surging Chinese steel imports

The president of Usiminas, Marcelo Chara, announced on Monday morning (11) during a press conference that the steelmaker will halt production at blast furnace 1. The reason for the adjustment is the surge in Chinese steel imports.

“The imports of Chinese steel are tearing apart the country’s industrial fabric and directly affecting the entire industry. They are entering the country at subsidized prices [by the Chinese government], causing tremendous damage,” stated Chara.

To remain competitive with imported steels, the executive informed that some technical adjustments are being made at the Ipatinga plant, one of them being the deactivation of blast furnace 1, a unit with a capacity of producing 600,000 tons/year.

“We will have to adjust production and scale back growth plans and investments, and we are already in the process of shutting down Blast Furnace 1,” explained Chara.

Chara also mentioned that there is no exact date for the equipment shutdown and emphasized that “it’s not possible to produce with all three blast furnaces under these market conditions.”

Impact

The “shutdown” of Blast Furnace 1 will repercute negatively across the Vale do Aço region. On top of the cut-clear reduction in Usiminas’ output, there will be a negative impact on job creation in the area.

“Lowering the production of such an important machine implies that we will have to lay off people,” said Chara, who preferred not to speculate on the number of layoffs that might occur.

“For now, there’s nothing defined. But a machine of this size involves people who work and services that are contracted, but unfortunately, we have to do this; otherwise, we compromise Usiminas’ competitiveness,” he emphasized.

Taxation of Chinese Steel

Chinese steel arrives in Brazil, subsidized by the Chinese government, with low prices that harm the competitiveness of the national steel industry.

Like other representatives of Brazilian steelmakers, Chara is urging the federal government to take measures, such as taxing Chinese products, as is done in countries like the United States, Mexico, and members of the European Union, among others. Such measures combat unfair trade. Marcelo Chara classified this process as a “defensive act.”

“The basic defense measure is equalizing protection rates, as countries like the United States and Mexico do. Import tariffs should be the same. This prevents [Chinese steel] from entering at subsidized prices,” he explained.

During the press conference, Marcelo Chara mentioned that directors of national steel companies, along with the Brazilian Steel Institute, have been calling for a meeting with Geraldo Alckmin, vice president and minister of Development, Industry, Trade, and Services, and Fernando Haddad, Minister of Finance.

Coking Plant 3

During the press conference, the president also stated that Usiminas’ Coking Plant 3 will be permanently shut down. In this case, the issue is not related to Chinese steel but rather environmental concerns, as explained by the executive.

“We decided to shut down Coking Plant 3 a few months ago because environmental conditions did not meet our commitment to the community,” he concluded.

Source: Diário do Aço

Click here to read the original news text: https://diariodoaco.com.br/noticia/0112016-usiminas-ira-paralisar-altoforno-1-devido-a-alta-importacao-do-aco-chines

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