Brazil's Steel Mill Sector to See $64 Billion in Investments

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Researched by Industrial Info Resources (Sugar Land, Texas)--The steel mill industry in Brazil is expected to receive investments of $64 billion until 2012. From this amount, 20% represents ongoing projects, 10% approved projects, 55% projects in the feasibility studies stage and only 6% represents suspended projects. Currently, there are 24 greenfield and brownfield steel mill projects being developed in Brazil.

The largest project in regard to capital expenditure is the $6 billion Pecem Steel Slab project, jointly developed by Vale (NYSE:RIO) (Rio de Janeiro, Brazil) and Dongkuk Steel Mill Company (SEO:001230) (Seoul, South Korea). Pecem has a planned production capacity of 5 million tons per year of steel plates. Promon (Rio de Janeiro, Brazil) is performing the feasibility study, which is scheduled to be concluded by year's end. Construction is set to begin by December 2009 with project completion planned by July 2011.

A $5.7 billion project is being developed by the Brazilian company Usinas Siderurgicas de Minas Gerais (OTC:USNZY) (USIMINAS) (Belo Horizonte). The Santana do Paraiso Steel Mill is expected to produce 5 million tons per year of steel beams. Construction will start in March 2009, and project completion is set for February 2011. For details, see related August 13, 2008, news article - USIMINAS Announces Construction of Third Steel Plant in Brazil.

Vale also solely owns a $5 billion project in the city of Maraba in northern Brazil that is planned to reach a production capacity of 5 million tons per year of hot laminated coils, heavy plates and lumps. Construction kickoff is planned by mid-2010 with completion set for 2012. For details, see related September 26, 2008, news article - Vale to Build $5 Billion Steel Mill in Northern Brazil.

Additionally, Vale owns 10% of Companhia Siderurgica do Atlantico, a joint venture with ThyssenKrupp AG (FRA:TKA) (Dusseldorf, Germany). This $4.4 billion project is being developed in Rio de Janeiro and is expected to produce 5.3 million tons of steel slabs, of which 60% will be exported to United States, Mexico and Canada, and the remaining 40% will be exported to Germany. The mill is scheduled to begin operation by the beginning of 2009.

After all of the planned projects are finished, 50 million tons of steel slabs, 10 million tons of laminated steel, 7.5 million tons of long carbon steel and also 5.6 tons of seamless steel tubes will be added to Brazil's steel-production capacity.

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