CSN to restart No2 blast furnace at Presidente Vargas mill in November

Companhia Siderúrgica Nacional (CSN) is preparing for a November restart of blast furnace No2 at its Presidente Vargas mill in the city of Volta Redonda in southeast Brazil, sources said this week.

“CSN is not a part of our association, but the information we have is that it will restart the No2 BF in November,” Marco Polo de Mello Lopes, executive president of the Brazilian steelmakers’ association Instituto Aço Brasil, said on Thursday October 1.
That No2 blast furnace was one of 13 furnaces halted in the country after demand plummeted due to restrictions to curb the spread of Covid-19. Furnaces began to be idled in April, but CSN announced the halting of No2 on May 29.
Most steelmakers have now restarted their furnaces, but two of the largest - the No2 furnace at Presidente Vargas and Usiminas’ No2 blast furnace at Ipatinga in the state of Minas Gerais - have yet to be restarted.
CSN did not respond to Fastmarkets' request for comment, but its chief financial officer, Marcelo Ribeiro, said on July 29 that the company would get the No2 blast furnace ready for a restart “before the end of November.”
“There are indeed talks of that BF coming back online, but it remains idle at the moment,” a mill source told Fastmarkets.
And a trader said the restarts would help meet current needs in Brazil.
“It makes sense to bring back halted capacity now because [the current level of] supplies is not meeting the growing needs of the customers,” the Brazil-based trader source said.
A second trader source added: “There is a hole in the market, and [those two blast furnaces] can help to fill it.”
CSN's No2 furnace has the capacity to produce 1.5 million tonnes per year of crude steel, of a total output of 5.6 million tpy at Presidente Vargas, according to a company filing with the US Securities & Exchange Commission (SEC).
Supply tightness and a global uptrend have been supporting higher domestic steel prices in Brazil, and a new round of 10-13% price increases was announced for October.
Fastmarkets assessed the price of steel hot-rolled coil, domestic, monthly, exw Brazil, at 3,150-3,200 Reais ($560-569) per tonne on September 11, up from 2,800-2,885 Reais per tonne on August 14.
In reaching a 2020 high in September, the HRC price was up by 36%, at the midpoint of the range, from 2,245-2,425 Reais per tonne on January 3.

Felipe Peroni

felipe.peroni@fastmarkets.com

Renato Rostás

renato.rostas@fastmarkets.com

Published

Felipe Peroni

Renato Rostás

October 02, 2020

17:25 GMT

São Paulo