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Brazil's largest steel company is planning to stop the blast furnace

Ukraine / South America / Ferrous metallurgy
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Lack of demand and high stocks of finished steel products CSN forced managers to think about reduction of steel production by a third.

Brazil's largest steel company is planning to stop the blast furnace

Brazilian integrated steel company Companhia Siderurgica Nacional (CSN) can stop its blast furnace No. 2 at the steel plant Volta Redonda due to weak demand and sufficient stocks, which can cover sales until the end of the year. The second blast furnace provides a third of all steel produced in the company.

"From a production point of view it makes sense to stay," said Friday the General Director of CSN, Benjamin Steinbruch in a conference call with analysts. "It makes sense because it will allow us to sell more iron ore to use less pellets and less dependent on the supply of coke".

According to him, one of the reasons why blast furnace No. 2 can continue to work, is to export, the restoration of which is a big question because of the pandemic.

CSN expects the cost of steel production will decrease if the blast furnace No. 2 will be stopped because the blast furnace No. 3, which provides two-thirds of steel production in the company last year have been repaired, and as a result operating costs were reduced.

Though the demand for steel is weak because of the decline in car sales and slow demand for home appliances, CSN plans to raise steel prices by 10-12% in June in Brazil, given the significant devaluation of the Brazilian real against the U.S. dollar this year.

"there's no getting around it. We will raise prices in June and see who will buy," said CSN commercial Director Luiz Fernando Martinez on a conference call.

the devaluation of the real makes the company more competitive abroad, and Martinez said that CSN has already chosen his full quota for US this year, shipped 300,000 tons of steel. Because of this, the company is looking for new customers in Canada, Mexico and Latin America.

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