Votorantim, ArcelorMittal merger could reduce Brazilian scrap prices, Inesfa says

The acquisition of Brazilian long steel producer Votorantim Siderurgia by ArcelorMittal’s Brazilian subsidiary could reduce ferrous scrap prices in the country by around 30%, according to local scrap association Inesfa.

The group is concerned that the merger could threaten competition and affect local scrap producers.
“Besides affecting scrap prices, [Brazilian] long steel prices are likely to increase after the acquisition,” Inesfa’s institutional relations director, Leonardo Palhares, said on Wednesday August 30.
In February, ArcelorMittal’s Brazilian subsidiary signed a deal for the purchase of long steel producer Votorantim Siderurgia, a move that the company considers necessary if it is to become more competitive.
“We are confident that the deal with Votorantim will yield significant synergies that are key for increased competitiveness,” ArcelorMittal Brasil told Metal Bulletin on August 31.
“The long steel industry in Brazil is marked by fierce competition, with the presence of long-established rivals and the entry of four new [participants] in recent years,” ArcelorMittal added.

The country’s competition regulator, Cade, recently considered the proposed purchase a “complex” issue, which could result in a relevant...

Published

Felipe Peroni

September 01, 2017

02:29 GMT

São Paulo