Aceros Arequipa new EAF to grow Peru scrap consumption

Market: Metals
03/05/21

Peruvian steelmaker Aceros Arequipa will begin melting at a new 1.25mn metric tonne (t)/yr electric arc furnace (EAF) at its Pisco mill by July, positioning it to take a larger role in the seaborne bulk ferrous scrap market.

The EAF will replace the mill's existing 850,000 t/yr furnace, which will be idled and eventually updated to return to service at an undetermined date.

The board of directors last week approved an additional $23mn in spending on the EAF, bringing the total project cost to $243mn, to allow it to make high-carbon steels. It also is spending $43mn to upgrade a rolling mill to boost production efficiency of steel profiles and round bar.

The EAF will begin melting by July, with the rolling mill upgrades expected to be completed in August. Construction on the EAF began in early 2018.

The additional melting capacity positions Aceros Arequipa to grow its presence in the seaborne ferrous scrap bulk import market, with plans to import 750,000 t/yr in 2022. The company plans to import 460,000t of ferrous scrap for the remainder of 2021.

Bulk ferrous scrap imports primarily come from usual suppliers in the US, though the company could look to Canada and Europe as well.

The US has been the leading scrap supplier of Peru since 2008, accounting for 80pc of its imports over that span, according to customs data.

Bolivia and Chile have accounted for 11pc and 7pc, respectively, of Peru's total scrap import volumes since 2008.

Peru has only imported two bulk vessels from Canada over the last 14 years, in November 2018 and one most recently in April, according to vessel tracking data. The country has not imported any bulk vessels or sizable containers from Europe.

Peru imported 470,700 t/yr of ferrous scrap annually from 2015-2019. In 2020, scrap imports dropped to 339,400t, a eight-year low, as steelmakers faced production shutdowns brought on by Covid-19-related restrictions.

In the first quarter, Peru imported 167,900t of scrap, its highest quarterly intake since the third quarter of 2017.

By Brad MacAulay

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