# 🌎 Central & South America Top Steel Producers

MIFUS Course: A Journey Through Global Steel Decarbonization

### 🎯 Technology Types

BF/BOF (Integrated)
EAF (Mini-mill)
DRI
Mixed Technologies

## 📊 Central & South American Steel Industry Overview

- Brazil: ~32 million metric tons crude steel production annually; largest producer in Latin America and 9th globally
- Argentina: ~4.5 million metric tons crude steel production annually
- Chile: ~1.5 million metric tons annually (note: Huachipato plant closed in August 2024 due to Chinese competition)
- Colombia: ~1.5 million metric tons crude steel production annually
- Peru: ~1.8 million metric tons crude steel production annually
- Venezuela: Historically significant producer, currently reduced capacity due to economic challenges
- Total Regional Capacity: Over 65 million metric tons per year (including Mexico)
- Major Producers: Gerdau (Brazil), CSN (Brazil), Usiminas (Brazil), Ternium (Argentina/Brazil/Colombia), ArcelorMittal Brazil, Aceros Arequipa (Peru)
- Technology Mix: Diverse mix of integrated BF/BOF mills (Brazil, Argentina, Chile), DRI-EAF facilities (Peru, Venezuela historically), and scrap-based EAF mini-mills throughout the region
- Key Markets: Construction (dominant), automotive (Brazil, Argentina), mining equipment, infrastructure, energy sector
- Regional Trade: Strong intra-regional trade; Brazil exports to Argentina, Chile, Peru; competition from Chinese imports affecting regional producers
- Iron Ore Advantage: Brazil possesses world's second-largest iron ore reserves; Vale is major global supplier; enables competitive integrated steel production

## 🌱 Decarbonization Initiatives in Central & South America

- Gerdau (Brazil): Latin America's largest steel recycler; converting millions of tons of scrap annually; investing in renewable energy integration for EAF operations; targeting 30% reduction in CO2 intensity by 2031
- CSN Volta Redonda (Brazil): Exploring carbon capture technologies for BF/BOF operations; investigating hydrogen injection in blast furnaces; owns hydroelectric power assets for cleaner electricity supply
- Usiminas (Brazil): Partnered with Ternium and Nippon Steel on decarbonization research; modernizing Ipatinga plant with energy efficiency improvements; studying EAF conversion pathways
- ArcelorMittal Brazil: Achieved ResponsibleSteel certification for multiple sites (Tubaro, Monlevade, Vega, Juiz de Fora, Resende); implementing circular economy practices; biomass charcoal use in some operations
- Ternium Argentina: Vientos de Olavarría Wind Farm ($225M investment) reduces CO2 emissions by 111,000 tons/year; modernizing San Nicolás mill with efficiency improvements; exploring hydrogen pathways
- Aceros Arequipa (Peru): Modern DRI-EAF technology already provides lower emissions footprint; upgraded to new SMS electric arc furnace in 2021; natural gas-based DRI offers transition to eventual hydrogen
- Regional Renewable Energy Advantage: High hydroelectric capacity (Brazil, Colombia, Peru) and wind/solar potential (Argentina, Chile, Brazil) support clean electricity for EAF expansion
- Biomass Charcoal: Brazil pioneering use of eucalyptus charcoal in blast furnaces as partial replacement for metallurgical coal; reduces fossil carbon emissions
- Challenges: Limited hydrogen infrastructure; competition from low-cost imports hindering investment capacity; need for carbon border adjustments; financing green steel premium

## 🔬 Technology Pathways & Regional Characteristics

- Brazil's Integrated Mills: Large BF/BOF operations (CSN Volta Redonda 5.8 Mt/y, Usiminas Ipatinga 3.5 Mt/y) face decarbonization challenge; pathways include CCS, hydrogen injection, biomass charcoal, or eventual EAF conversion
- Scrap-Based EAF Growth: Gerdau's extensive EAF network across South America represents lower-carbon pathway; limited by scrap availability as regional economies develop and scrap generation increases
- DRI-EAF Technology: Proven in Peru (Aceros Arequipa Pisco 2.1 Mt/y), Argentina (Tenaris Campana), historically in Venezuela (Sidor); natural gas-based DRI offers lower emissions than BF/BOF; hydrogen-ready technology for future conversion
- Renewable Energy Integration: Brazil's 60%+ renewable electricity grid (primarily hydro) provides clean power for EAF operations; Argentina and Chile developing wind resources; Colombia has hydroelectric potential
- Biomass Innovation: Brazil's unique approach using sustainably-grown eucalyptus charcoal in blast furnaces; reduces dependence on imported metallurgical coal; lowers carbon footprint while maintaining integrated steelmaking
- Regional Scrap Markets: Growing urban centers increasing steel scrap availability; Gerdau established scrap collection networks; cross-border scrap trade developing within Mercosur
- Natural Gas Availability: Argentina, Bolivia, Peru have natural gas resources supporting DRI operations; pipeline infrastructure enables gas-based steelmaking; bridge technology to eventual green hydrogen
- Infrastructure Gaps: Limited CO2 transport/storage infrastructure for CCS; hydrogen production and distribution undeveloped; grid capacity constraints in some areas for large-scale EAF expansion

## 🏭 Major Steel Producers & Capacity

- Gerdau (Brazil & South America): Brazil's largest steel producer; 30% of Brazil's capacity; operations in Brazil, Argentina, Chile, Colombia, Peru, Uruguay; primarily long products via EAF; special steels; annual capacity >10 Mt/y regionally
- CSN - Companhia Siderúrgica Nacional: Volta Redonda (Brazil) 5.8 Mt/y integrated BF/BOF; largest fully integrated producer in Brazil; flat steel products; owns iron ore mines (Casa de Pedra); railway logistics; port facilities
- Usiminas: Ipatinga (Brazil) 3.5 Mt/y, Cubatão facility; 9.5 Mt/y total capacity; Brazil's leading flat steel producer; joint control by Ternium, Nippon Steel, employees' pension fund; automotive steel specialist
- ArcelorMittal Brazil: Multiple facilities including Tubaro, Monlevade, Vega; flat and long products; ~4.5 Mt/y capacity; serving automotive, construction, energy sectors
- Ternium Argentina: San Nicolás (Siderar) 2.8 Mt/y integrated BF/BOF; Argentina's largest steelmaker; flat and long products; also operates Campana (Tenaris) DRI-EAF for seamless tubes
- Acindar (ArcelorMittal Argentina): Argentina's largest long products producer; EAF-based; construction and industrial steel
- Ternium Colombia: Palmar de Varela 0.5 Mt/y; EAF long products for construction
- Aceros Arequipa (Peru): Pisco 2.1 Mt/y; DRI-EAF technology; Peru's largest producer; construction steel, wire rod, profiles; exports to Bolivia, Ecuador, Colombia
- Gerdau Siderperú: Peru's only blast furnace operation; integrated and EAF capacity; long products; controlled by Gerdau
- CAP Huachipato (Chile): Talcahuano 1.5 Mt/y; Chile's only integrated mill; BF/BOF technology; CLOSED August 2024 due to Chinese import competition; significant regional development affecting Chilean steel industry

## ⚡ Regional Energy & Infrastructure Context

- Brazil's Renewable Grid: >60% renewable electricity (primarily hydroelectric); enables lower-carbon EAF steel production; CSN owns hydroelectric stakes (Itá, Igarapava); Gerdau pursuing renewable PPAs
- Natural Gas Infrastructure: Argentina, Bolivia major gas producers; pipelines to Brazil, Chile; enables DRI technology; Peru's Camisea gas field supplies Aceros Arequipa DRI plant
- Iron Ore Resources: Brazil (Vale, CMP) world's 2nd largest reserves; Argentina limited deposits; Chile imports from Brazil; integrated mills benefit from proximity to ore sources
- Scrap Supply Chains: Growing with urbanization and industrialization; Gerdau operates extensive collection network; cross-border scrap trade within Mercosur; quality and quantity increasing as economies develop
- Logistics Infrastructure: CSN's railway network (MRS, Transnordestina) connects mines to mills and ports; Brazil's port system (Sepetiba, Itaguaí) enables iron ore and steel exports; inland transport challenges in some countries
- Electricity Grid Constraints: Large EAF operations require substantial power; grid capacity limitations in some regions; Argentina, Venezuela face electricity reliability issues; Brazil's grid relatively robust
- Water Availability: Abundant water resources in most regions (Amazon, Paraná basins); water recycling implemented at major mills; CSN uses Paraíba do Sul river with recirculation systems
- CO2 Storage Potential: Brazil exploring geological storage sites; limited CCS infrastructure currently; research needed on regional sequestration capacity

## 📈 Market Dynamics & Challenges

- Chinese Import Competition: Massive influx of low-cost Chinese steel destabilizing regional markets; led to Huachipato closure (Chile); pressure on profit margins; calls for anti-dumping measures and tariffs
- Economic Volatility: Regional economic cycles impact steel demand; construction sector highly sensitive to GDP growth; infrastructure investment crucial for demand; automotive sector concentrated in Brazil, Argentina
- Mercosur Trade Integration: Common Southern Market facilitates steel trade among Brazil, Argentina, Uruguay, Paraguay; harmonization of standards; but also exposes producers to intra-regional competition
- Demand Patterns: Steel consumption 100-120 kg per capita in Brazil; lower in other countries; construction dominates consumption; mining equipment market significant (especially in Chile, Peru)
- Export Markets: Brazil major exporter of semi-finished products (slabs, billets); lower value-added than finished products; exports to Middle East, Asia, North America; regional exports to neighbors
- Environmental Regulations: Increasingly stringent in Brazil, Argentina, Chile; ResponsibleSteel certification becoming market requirement; carbon pricing discussions; "Buy Green" policies emerging
- Financing Green Transition: Limited access to low-cost capital for decarbonization investments; green finance mechanisms developing; need for international climate finance; carbon border adjustments could help level playing field
- Political & Economic Instability: Venezuela's steel sector collapsed due to economic crisis; Argentina's recurring economic challenges; political changes affecting investment climate; currency fluctuations impacting competitiveness

## 🌍 Decarbonization Roadmap & Future Outlook

- Near-term (2025-2030): Expand EAF capacity leveraging growing scrap availability; implement energy efficiency improvements at existing BF/BOF mills; increase renewable energy procurement; pilot biomass charcoal expansion (Brazil); early hydrogen injection trials
- Medium-term (2030-2040): Scale up renewable energy integration; convert selected BF/BOF facilities to EAF where economics favorable; expand natural gas DRI capacity as bridge technology; develop regional hydrogen infrastructure; implement carbon pricing mechanisms
- Long-term (2040-2050): Transition remaining integrated mills to green hydrogen DRI-EAF or implement CCS; achieve net-zero emissions across major producers; establish circular economy for steel with >50% recycled content; position Latin American steel as low-carbon for export markets
- Regional Cooperation Needs: Harmonize carbon accounting standards; coordinate on hydrogen infrastructure development; share R&D on biomass and alternative reducing agents; joint positions on trade policy and carbon border adjustments
- Investment Requirements: Estimated $30-50 billion needed regionally for full decarbonization; mix of private capital, development bank financing, climate funds; policy certainty crucial for investment decisions
- Competitive Positioning: Region can leverage renewable energy advantage; potential to become low-carbon steel exporter; need protection from carbon-intensive imports; green steel premium could improve economics
- Technology Priorities: Scale proven EAF and DRI technologies; develop local hydrogen production capabilities; advance biomass charcoal in Brazil; selective CCS deployment; improve energy efficiency across all operations
- Policy Enablers Needed: Carbon pricing or emissions standards; anti-dumping measures against high-carbon imports; green public procurement; R&D funding; workforce transition support; clear long-term climate targets

## 📚 Resources & References

Mixed public sources including Global Energy Monitor (GEM) Global Iron and Steel Tracker, World Steel Association, ALACERO (Latin American Steel Association), company websites, and industry reports. For plant-level accuracy and latest updates, verify with GEM.wiki.

Note: This map represents major steel producers (≥500,000 tonnes/year capacity). Click markers for plant details and links to additional information. The closure of Chile's Huachipato plant in August 2024 marks a significant change in the regional landscape.