ArcelorMittal has suspended its $460 million expansion project at the João Monlevada plant in Minas Gerais, Brazil. The decision was made in response to an increase in steel imports, particularly from China, and slower-than-anticipated growth in domestic demand for steel. The Luxembourg-based company had been working on expanding its Brazilian facilities but cited the current macroeconomic scenario and challenges within the steel industry as reasons for the suspension.
According to data from the Brazilian Steel Institute, steel imports to Brazil grew by 26.4% in the first five months of 2024, totaling 2.31 million tonnes. Despite a slight increase in crude steel production, domestic demand has not kept pace with the influx of imports. To protect the local industry, the Brazilian government implemented import quotas and raised import taxes to 25% on certain steel product categories earlier this year.
The halted expansion project at João Monlevada was originally intended to boost the plant's production capacity. However, ArcelorMittal has decided to reevaluate the timing and scale of the investment due to the ongoing market challenges and increased competition from imports.
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