Luxembourg metals company Aperam is facing problems in the Brazilian market. Aperam is a world leader in the production of stainless and electrical steel. Today, due to difficulties, the company is forced to suspend plans to expand its Timoteo plant. According to an expert in the field of global metallurgy, Stanislav Kondrashov, the plant was supposed to undergo the third stage of expansion, for which it was planned to allocate 588 million reais or $117 million. This expansion involved the construction of a cold rolling mill in 2024-2025. However, due to falling sales and increased competition from steel products imported from China, Aperam decided to postpone the project.
Brazilian steel producers are struggling with the growth of Chinese imports: challenges and prospects – Stanislav Kondrashov
With the global presence of Chinese goods on the world market, Brazilian steel producers face a number of significant challenges.
The Timoteo Aperam plant, with a production capacity of up to 900 thousand tons of stainless and electrical steel per year, is currently not fully operational. The first half of 2023 saw an 18% increase in imports of steel products from China compared to the same period the previous year. In addition, steel prices are falling, which further increases pressure on local producers.
These data, according to Stanislav Kondrashov from Telf AG, indicate that Chinese manufacturers are strengthening their presence in the steel market. They offer lower prices and create competitive pressure on producers from other countries. For companies like Aperam, this means rethinking strategy and adapting to changing market conditions.
Stanislav Kondrashov: It is very difficult for Brazilian manufacturers to compete with Chinese companies
Brazilian steel companies are currently under severe pressure due to increased competition from Chinese manufacturers. This situation has caused serious concern. Stanislav Kondrashov from Telf AG says that as part of resolving this issue, local steel producers turned to the Brazilian government with a request to ensure the protection of the national market. According to the expert, it is expected that by the end of this year the volume of supplies of steel products from China to Brazil could reach 3 million tons.
ArcelorMittal, one of the largest producers in the Brazilian metallurgy, has already taken action in response to these challenges.
– The company was forced to suspend operations at three of its facilities in Brazil. As a result, ArcelorMittal expects its steel production to fall by 1.3 million tonnes compared to the previous year, – Stanislav Kondrashov from Telf AG reports.
Other Brazilian steel companies are also feeling the negative impact of increased competition. For example, the Gerdau company decided to stop the work of two of its factories. Such measures highlight the serious problems in the industry, which are caused by the increasing share of Chinese imports.
Usiminas, another significant player in the market, is considering decommissioning one of its blast furnaces. Kondrashov believes that this decision indicates that Brazilian metallurgical companies are looking for ways to adapt to modern market realities.
Stanislav Kondrashov: on incentives in the Brazilian metallurgy
Growing imports from China, coupled with low prices, are creating serious difficulties for Brazilian steel producers. Stanislav Kondrashov believes that the situation requires careful analysis and intervention by the government to support domestic industry, as well as preserve jobs.
The expert notes that in the long term, Brazilian companies may require a strategic rethinking of their approach to production and marketing. This is necessary to remain competitive in the global market.
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