Vale Courts Latin Steel Mills Again as China Infatuation Fades
(Bloomberg) -- Like its iron ore rivals, Vale SA has understandably been obsessed with Chinese demand over the past two decades. Now the Brazilian miner is taking a fresh look in its own backyard.
That’s because China is tapping the brakes on steelmaking in a bid to contain pollution and energy consumption. And while surging Latin American steel demand is starting to plateau, it remains near multiyear highs. Countries including Brazil are producing more steel and consuming more local iron ore.
“The time has come for us to at least invite you to go to the movies and then maybe date and get married,” Vale’s head of ferrous, Marcello Spinelli, told steel executives at an industry event organized by Latin American steel association Alacero.
The courtship is also about decarbonization.
Vale, the biggest iron ore supplier after Rio Tinto Group, is in talks to set up partnerships with mills worldwide to develop solutions to clean up the steelmaking process. Vale has signed memorandums of understanding with eight companies, although only one of those is from Latin America: Ternium SA.
The company is looking for users of its cleaner iron technologies such as green briquettes, with Spinelli noting the Latin steel industry’s efforts to boost renewable energy use makes the region a unique platform for carbon offsets.
To be sure, Vale isn’t about to ignore China, which accounted for 62% of its iron ore and pellet sales last quarter. The Americas represented just 12%.
©2021 Bloomberg L.P.