The Special Secretary for Productivity, Employment and Competitiveness of the Ministry of Economy (Sepec / ME), Carlos Da Costa, visited yesterday (01/10) the Gerdau plant, in Araçariguama, São Paulo. After the visit, he talked to the press alongside the president of the Board of Directors of the Aço Brasil Institute, Marcos Faraco (Gerdau), and the executive president of Aço Brasil, Marco Polo de Mello Lopes. The purpose of the visit was to learn about the production process of a modern mini-mill, whose products are intended for civil construction and to evaluate with the Brazil Steel the capacity of the national steel industry to supply the domestic market in the face of the rapid recovery of the economy, especially in that segment.

At the height of the COVID-19 pandemic in Brazil, there was a sharp drop in consumption and the Brazilian steel industry had to shut down blast furnaces and paralyze other production units, even operating with only 45% of its installed capacity. The prognosis for falling GDP was then bleak not only in Brazil but in the vast majority of countries. Fortunately, the resumption of economic activity has been faster than expected. As soon as signs of increased demand for steel emerged, the steel sector began to reactivate its production, in order to respond quickly to customer orders. Today, the utilization of installed capacity is the same as in January this year (63%).

Specifically in the civil construction segment, one of the largest steel consuming sectors, the major consumption is rebar. The majority of rebar production comes from mini-mills, plants that do not have blast furnaces and use mainly recycled steel scrap as a raw material in electrical steelworks. A smaller portion of rebar production is obtained from an integrated route mainly from charcoal, which produces pig iron in smaller ovens and then steel in steelworks.

These two production routes are versatile and easier to operate, responding even more quickly to the eventual increase in demand, such as what happens at the present time. At present, the plants of the steel groups that produce the rebars used in civil construction - ArcelorMittal, Gerdau, Aço Verde Brasil, Sinobrás, SIMEC and CSN - are in full operation, with production above pre-crisis levels, with the information about scarcity of rebar.

The Brazilian steel industry is fully capable of meeting the demand of the domestic market, as it has already done, and ensures that this is its highest priority.

The Steel Brazil Institute presented, on the occasion, the revision of the forecast for the closure of data for 2020, with the reduction of the significant falls previously forecast for the production of crude steel, domestic sales, exports, imports and apparent consumption.