Sudden spike in steel demand keeps ArcelorMittal's Vaal shop open

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  • ArcelorMittal has opted to continue running its Vereeniging operations, which had been scheduled to be put under care and maintenance in December last year. 
  • The steel producer, which supplies more than 60% of the steel used in SA, said it would increase output from its electric arc furnace. 
  • The company says keeping the plant running will save jobs.


A surprise uptick in steel demand, after months of a lull in activity, prompted ArcelorMittal to continue running its Vereeniging operations, which were scheduled to be put under care and maintenance at the end of December 2020.

The steel producer, which is the largest in Africa, said on Thursday it will increase output from its electric arc furnace in the short term, with the possibility of maintaining these levels based on future demand. 

The furnace, also known as the Vaal Meltshop, has received a boost from an "unexpected and sudden increase" in demand in South Africa and Africa overland markets, according to ArcelorMittal.

"With the Vaal Meltshop fully operational and supplementing our three blast furnaces in Newcastle and Vanderbijlpark, we expect that we will be more than able to meet the steel requirements in South Africa and neighbouring countries in the coming months," said CEO Kobus Verster.

ArcelorMittal supplies more than 60% of the steel used in South Africa.

The steel demand had hit a slump in 2020, with Covid-19 lockdowns contributing to the low domestic demand. ArcelorMittal responded to the downward trend in July last year by temporarily idling furnaces at Vanderbijlpark and Vereeniging until demand for steel had recovered.

The producer said placing the Vaal Meltshop under care and maintenance would have potentially led to some 85 job losses, while keeping the plant running could add jobs.

The Vereeniging operation had been running at about half its capacity in recent years and the company said pushing it to full capacity would mean a significant increase in billet production.

This will be used for specialty input material to the Gauteng operations, including Leeuwkuil Mill, tubular products, the forge operations and the small section mill in Tshwane. 

*Compiled by Sibongile Khumalo

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