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South America Steel Market: COP30 Uncertainty Impacts Activity Amidst Climate Finance Debates

South America’s steel market faces uncertainty as COP30 climate discussions in Brazil unfold. The potential impacts of climate finance and trade measures debated at COP30, highlighted in articles like “Cop 30 braces for first test on divisive issues” and “COP 30 in Brasilien: Läutet Belém das Ende des fossilen Zeitalters ein?,” may influence future steel production costs and trade flows. However, no immediate and direct link between the conference’s progress and the observed plant activity levels can be definitively established based on the provided information.

Bar chart and satellite map of steel production activity in South America

The mean steel plant activity in South America shows a significant drop to 18% in October, following fluctuations in previous months.

ArcelorMittal Tubarão, a large integrated steel plant in Espírito Santo, Brazil, with a crude steel capacity of 7500 ttpa and relying on BF/BOF technology, exhibited a decline in activity from a high of 68% in July to 43% in October. Given the plant’s integrated BF route, potential policy shifts emerging from COP30, as outlined in “Cop 30 braces for first test on divisive issues,” regarding carbon emissions and trade, could indirectly affect its future operations. However, no direct causal link between COP30 and the recent activity drop can be definitively established from the provided information.

Ternium Siderar San Nicolás, an integrated BF/BOF steel plant in Buenos Aires, Argentina, with a crude steel capacity of 3200 ttpa, shows a consistent increase in activity, peaking at 79% in October. This contrasts with the regional average decrease. No specific connection to the COP30 news articles can be established based on the provided information.

Aperam Timóteo, a Brazilian steel plant in Minas Gerais producing stainless and special steels via BF/BOF/EAF route with a crude steel capacity of 900 ttpa, maintained a stable activity level around 47-48% over the observed period. As the plant utilizes charcoal (biomass) as a substitute for coke, potential discussions around renewable energy at COP30, as mentioned in “COP 30 in Brasilien: Läutet Belém das Ende des fossilen Zeitalters ein?,” could have long-term implications for its operational costs and sustainability profile, but no immediate impact is evident in the activity data.

Given the significant drop in mean steel plant activity and the uncertainties surrounding COP30 outcomes, steel buyers should:

  • Closely monitor COP30 developments: Track negotiations, particularly those related to climate finance, carbon border adjustment mechanisms, and renewable energy targets, as discussed in “Cop 30 braces for first test on divisive issues,” to anticipate potential cost impacts and trade barriers affecting South American steel.
  • Diversify sourcing: Given the ArcelorMittal Tubarão’s activity decrease, explore alternative supply options from Ternium Siderar or other regions to mitigate potential supply disruptions of slabs and hot-rolled coils.
  • Engage with suppliers on climate risk: Initiate dialogues with key suppliers, particularly integrated steel producers like ArcelorMittal Tubarão and Ternium Siderar, to understand their strategies for adapting to potential policy changes and carbon regulations emerging from COP30.