Steelmakers are halting production in southern Brazil due to flooding and trying to gauge business losses

Gerdau said the halt in production in the region will not affect product deliveries, but there is still no deadline for a return to these companies’ units.

ArcelorMittal said negotiations with customers in the region are already being affected by road closures. The company also reported flooding at one of its distribution centers and said other units in the region are isolated.

Usiminas and Companhia Siderúrgica Nacional (CSN) could not estimate how much had been lost, nor whether the water entered the warehouses or how long the outage would last.

Rain in the southern region of the country started on April 27 and became increasingly heavy on April 29, causing flooding in several regions of Rio Grande do Sul. In agriculture, the state is a major producer of grains and grains and, as far as the steel sector is concerned, an important region for distribution and imports.

Faced with heavy rainfall and increasing flooding, the government declared a state of public disaster on April 2. Brazil’s Gerdau was the first local steelmaker to announce suspensions.

Last weekend, the company halted production at its Charqueadas and Riograndense units, both located in the state of Rio Grande do Sul, with the aim of ensuring worker safety amid the heavy rains that caused flooding and deaths in the region .

“Gerdau emphasizes that the suspension of operations will not affect deliveries to customers and that none of the units have been affected by the storms,” the company said in a written statement on Monday, May 6. The company said operations will resume in the state. when it determines that conditions are safe.

Riograndense produces rebar, commercial steel, wire rod, drawn products and nails, with a capacity of 450,000 tons of raw steel per year and 492,000 tons of rolled products. The Charqueadas unit works with bars, profiles and wire rods, with a capacity of 430,000 tons of raw steel and 730,000 tons of rolled steel.

At the request of Fastmarkets, the country’s other three largest steelmakers, ArcelorMittal, CSN and Usiminas, also issued statements updating the status of their operations in southern Brazil.

ArcelorMittal’s statement said its Canoas Logistics Center (CL), located in the capital’s metropolitan region, Porto Alegre, was directly affected by the floods. The same happened with the company’s commercial partner in the region, DBM Cofercan.

“At the other units in the most affected region – Distribuidor Belgo Avançado (DBA) in Porto Alegre, Caxias do Sul, Santa Maria and Pelotas – the structures are not affected but are isolated,” the statement said. “The Belgo Avançado distributor (DBA) in Ijuí and Passo Fundo were not affected.”

However, the affected steel volumes per unit cannot yet be estimated.

With roads in the region largely closed, ArcelorMittal said in the statement that it is difficult to transport materials from the units.

“This will impact the scale of operations in the region,” the company statement said.

A Brazil-based trader stressed that while it is still difficult to measure the scale of the crisis, effects on sales can be expected.

“The fact is that the roads are completely flooded, and even if the port in the region is operating, there is no way to transport products, so all negotiations in the region should have been stopped,” the trader said.

Usiminas halted operations at its Porto Alegre facility, which produces 79,000 tons of seamed pipes per year. But there is still no information on the impact on company turnover and whether the strike should affect the supply of the material.

CSN’s statement said that all its actions are now focused on safety and supporting the population, and that the company will be able to comment on other issues “in due course”, without providing details on the steel production problems or distribution in the region.

The four companies expressed solidarity with the workers affected by the tragedy and said they will prioritize the safety of the affected workers and the population of the region.

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