A REVIEW OF STEEL

PRODUCTION AND
CONSUMPTION IN SOUTH
AMERICAN COUNTRIES
OTHER THAN BRAZIL
Jorge Madias
6th Annual Americas Iron Ore Conference, November 2013, Rio de Janeiro, Brazil

Agenda
Introduction
Discussion country by country
Conclusions

metallon
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Based in San Nicolas, Argentina
Serving the steel industry and its chain value in Latin
America
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Introduction
4

Argentina, Chile, Colombia, Ecuador, Paraguay, Peru,

Uruguay, Venezuela

Hot metal production, 2012:

DRI/HBI production, 2012:
Production crude steel, 2012:
Production rolled products, 2012:
Imports rolled products 2012:
Exports rolled products 2012:
Apparent consumption 2012:

3,556,000 t
6,176,000 t
11,855,000 t
11,730,000 t
7,908,500 t
1,471,600 t
18,167,400 t

Introduction
5

Apparent consumption per capita 2012

200
180
160

Kg/inhabitant

140
120

100
80
60
40
20

0
Chile

Argentina Venezuela

Ecuador

Peru

Colombia

Uruguay

Paraguay

Introduction
6

Discussion country by country

Companies

- Ownership
Ironmaking units, iron ore suppliers
Production of rolled steel (flat and long products)
Apparent consumption
Imports and exports
Investments
Consequences on iron ore demand

Argentina: Market protection

7

SIDERAR (Ternium Techint Group) Flat products

Acindar (ArcelorMittal Group) Long products
AcerBrag (Votorantim Group) Long products
SIPAR (Gerdau Group) Long products
Aceros Zapla (Taselli Group) Long products
SIDERCA (Tenaris Techint Group) Seamless pipes
Small producers of rebar and ingots for forging

Argentina: Market protection

8

Ironmaking units
SIDERAR:

Blast furnace 1 & 2

ACINDAR: Midrex shaft furnace
SIDERCA: Midrex shaft furnace

Iron ore supply

Brazilian

pellets (Minas Gerais & Carajas)

Brazilian lumps (Corumba)

Argentina: Market protection

9

Rolled products (x 1000 t)

Production

Imports

Exports

Apparent
consumption

2008

5,077

866

1,171

4,772

2009

3,626

557

994

3,189

2010

4,913

787

1,095

4,605

2011

5,376.7

983.3

970.5

5,380.5

2012

4,592

904.8

1,001.3

4,855.5

2013 7 months

2,891

423.4

434.8

2,879.6

Exports are somewhat larger than imports

Argentina: Market protection

10

Rolled long products

More imports than exports

Imports: SBQ, heavy shapes
Exports: bar, wire rod

Rolled flat products

More

exports than imports just in crisis times

Imports: heavy plate, exposed car body cold rolled, stainless and
other special steel strip
Exports: hot and cold rolled carbon steel strip

Seamless pipes
Mostly

exported

Argentina: Market protection

11

Steel production oriented to the domestic market,

except for seamless pipes
Current investments (main driver: substitution of imports)

SIDERAR
RH for ultra low carbon and higher API X grades (in start up)
Second slab caster (in start-up)

Laminados Industriales Beltrame Group

Heavy plate rolling mill (in start-up)

Announced
Acindar, new rolling mill for rebar, M USD 100
Gerdau, new meltshop (integration of a re-roller)

Venezuela: Lagging behind

12

SIDOR (State owned) Flat & long products

CSN (State owned, former SIDETUR) Long
products
SIZUCA (Gerdau Group) Long products
Production

Imports

Exports

Apparent
consumption

2008

3,676

454

1,062

3,068

2009

3,094

539

1,403

2,230

2010

1,559

423

187

1,795

2011

2,086

570

673.4

2012

2,065

1,010.9

163.1

3,239

2013 7 months

1,366

482.9

91.0

1,757.9

Venezuela: Lagging behind

13

Ironmaking units
SIDOR

(Midrex & HyL III) ; own pelletizing plant

HBI modules under state administration

Iron ore supply

Pellet

feed & pellets from Ferrominera del Orinoco

(state owned)

Venezuela: Lagging behind

14

Rolled products (flat, long, pipes)

Decline

after nationalization
Switch to long products
Flat

Long

Pipes

2008

2,252

1,476

45

2009

1,655

1,436

2010

721

838

2011

866.1

1,220.3

2012

957

1,108

2013 7 months

683

682

Chile: No more flat products

15

CAP Acero - long products (CAP Group)

Gerdau - long products
Production

Imports

Exports

Apparent
consumption

2008

1,517

1,248

49

2,716

2009

1,279

558

89

1,748

2010

677

1,864

95

2,446

1,209.1

88.2

2011
2012

1,598

1,556.9

55.3

3,210.2

2013 7 months

787

838.5

17.7

1,607.8

Chile: No more flat products

16

Ironmaking units
CAP

Acero (one blast furnace to be shut down)

Blast

furnace 1
Blast furnace 2

Iron ore supply

Pellets

from CAP Mining

Chile: No more flat products

17

Local steelmakers are far of supplying the domestic

market with their own production
CAP Acero leaving flat products (shutdown of slab
caster, hot rolling mill and downstream facilities)
Investment

CAP Acero: billet caster, long products rolling mill

Consequences for iron ore demand

Fall

due to imminent shut down of one blast furnace

Colombia: Low cost imports

18

ACESCO (Escobar family) Flats, departing form

imported slabs
Gerdau Long products
Aceras Paz del Ro (Votorantim) Long products
SIDENAL Long products (merger with HORNASA)
Ternium Colombia (former ACASA) Long products
SIDOC (Armitage family) Long products
Andean Iron Corp. - Pig iron (Oceanside Capital,
Canada; Pacific Rubiales Energy, Venezuela)

Colombia: Low cost imports

19

Ironmaking units
Acerias
Mini

Paz del Rio

Blast Furnace

Andean

Iron Corp. (Zipaquira)

Mini

Blast Furnace 1 in start up

Mini Blast Furnace 2 under construction

Iron ore supply

Acerias

Paz del Rio: Minas Paz del Rio (lumps)

Andean Iron Corp.: own mine

Colombia: Low cost imports

20

Production

Imports

Exports

Apparent
consumption

2008

1,435

1,922

158

3,199

2009

1,464

1,280

147

2,597

2010

1,641

1,762

150

3,253

2011

1,779.5

1,981.2

124.5

3,636.2

2012

1,725

1,894.1

101.9

3,721

2013

738

1,095.2

73.5

1,759.7

Colombia: Low cost imports

21

Despite of mergers and acquisitions, still there is a low

grade of concentration of the offer, in long products
More imports than production
Industry working at 60% capacity
Heavy losses for Paz del Rio and Gerdau
Investments
CIPROCOLSA Pig iron project (?)
Ternium Colombia M USD 25
Paz del Rio: decline to invest due to fierce competition of
wire rod imports

Peru: Jumping forward?

22

Corporacin Aceros Arequipa, Cilloniz family and

others, long products
Siderper, Gerdau Group, long products

Ironmaking units

Two Coal-based DRI rotary kilns, Aceros Arequipa

Mini Blast Furnace in Siderperu: revamped but still idle

Iron ore supply

Shougang Hierroperu, pellets
Aceros Arequipa mines, lumps

Peru: Jumping forward?

23

Growing domestic demand, satisfied with increased

imports, for both flat and long products
Production

Imports

Exports

Apparent
consumption

2008

926

1,289

66

2,149

2009

871

781

111

1,541

2010

1,035

1,476

130

2,381

2011

913.1

1,253.5

124.5

2,022.9

2012

1,211

1,573.1

143.7

2,927.8

2013 7 months

806

981.3

69.6

1,717.7

Peru: Jumping forward?

24

Recent investments
New

rolling mill started-up in Corporacion Aceros

Arequipa
Upstream investment in iron ore mining and coal mining
by Aceros Arequipa
CDII Minerals Blast furnace project in Ilo

Impact on iron ore supply

Small

impact expected
A process for partial replacement of Shougang pellets
by own lumps is under way

Ecuador: No global players

25

ANDEC Holding DIME (state owned, army

officers) Long products
ADELCA Avellan family Long products
NOVACERO Villacres family Long products
TALME Long products (with imported billets)

100% scrap based No ironmaking facilities

Ecuador: No global players

26

Only long products are produced; no exports

Domestic demand unsatisfied
Recent investments:
Consteel

EAF at ANDEC and NOVACERO

3rd continuous casting strand at ANDEC
Production
Imports
Exports
Consteel
EAF at NOVACERO

App. Consum.

2008

560

762

1,322

2009

442

1,127

1,569

2010

500

765

1,258

2011

523

974.5

14.7

1,482.8

2012

556

953.9

5.4

1,515.3

2013 7 months

432

702.7

6.9

1,127.8

Smaller markets
27

Paraguay:
ACEPAR (Taselli Group) Long products
2012: 22 Kt
2013: 2 charcoal based blast furnaces idled

Uruguay:
LAISA (Gerdau Group) Long products
2012: Prod. 74 Kt; Imp. 141 Kt; Exp. 1 Kt

Bolivia
No local production
No import figures published
LAMINOR starting up in Oruro (Las Lomas Group)

Conclusions
28

Two different worlds

Pacific countries
No protection for the industry
Unrestricted imports
Industry below capacity while importing more than is produced
locally
Chile, Peru: Iron ore exported to China, then steel imported from
China

Argentina
Strong protection of the industry
Pressure for substitution of imports

Venezuela

Far from realizing its potential as a steelmaking country

Conclusions
29

Special features
State owned companies in Venezuela and Ecuador
Important role of local investors
Domestic iron ore demand 2/3 DR, 1/3 BF
Domestic production 2/3 EAF, 1/3 BOF

Domestic market driven companies

In most countries local production is not enough for the
demand
No large expansion projects under way
Medium range: slight increase in iron ore consumption is
expected