Brazilian steelmaker Gerdau expects steel demand in Argentina to rise in the second half of the year driven by higher economic activity, CEO Andre Gerdau Johannpeter said during a conference call Wednesday.
"The Argentinian market is expected to have 2.5% GDP growth on year in 2017, and during this second year of [Mauricio] Macri's government we're seeing investments resumed, and this situation benefits us," Johannpeter said.
Gerdau's new 650,000 mt/year electric arc furnace, located in the city of Perez, Santa Fe state, started operations in June. With a total investment of $232 million, it will increase installed capacity for long steel production in the country by 35%.
"It could take between six months to a year for operations to stabilize in the plant," Johannpeter said.
The CEO said the new EAF would be supplied with local ferrous scrap, and its billets would be directed to the company's existing rolling mill at the same site. Previously, it was able to roll 260,000 mt/year.
The company's primary goal for the EAF is to be able to end billets imports, which cost it around $100 million/year. The company also said it does not exclude the possibility of future exports from Argentina.
Gerdau has operations throughout Latin America, including longs mills in Argentina, Chile, Colombia, the Dominican Republic, Mexico, Peru, Uruguay and Venezuela, as well as longs and flats operations in Brazil.
