Gerdau announced that it has started the production of heavy plate at its steel plant in Minas Gerais, Brazil. According to the Brazilian company, its mill has the capacity of producing 1,1 million tons of heavy plates per year, which will be directed to both domestic and foreign market.
Although the demand of steel in Brazil has decreased, due to the negative impact of retractions in the infrastructure and civil construction sectors, Gerdau expects a positive recovery for this sector in the near future.
Another Brazilian company, Usiminas, used to be the only producer of heavy pates, with an installed capacity of 2 million tons per year, almost twice the current demand of the Brazilian market. Although the Brazilian market is still dominated by Usiminas, Gerdau will have the help of its Japanese partner, JFE Steel, in order to develop a high quality product, increase its market share and become more competitive.
With the current setting, the current antidumping investigations initiated in Brazil against imports of foreign steel makers seem to be in line with the steel industry strategy of increasing its participation in the domestic market while avoiding international competition. In this regard, it is likely that Gerdau gather with Usiminas for purposes of protecting the Brazilian market, as it can be seen in the recently initiated investigation against exports of hot-rolled steel from China and Russia. Additionally, with the entrance of Gerdau in the heavy-plate market, it is expected that both companies also gather to back up the sunset review on duties applied on heavy plates imports, expected to expire in 2018.