ArcelorMittal South Africa (AMSA) will imminently increase output from its electric arc furnace in Vereeniging, known as the Vaal Meltshop, on the back of increased demand and supply shortages. Production could stay at higher levels if warranted by future demand, AMSA tells Kallanish.
The move has been driven by “…the unexpected and sudden increase in demand in South Africa and Africa overland markets, and the associated supply chain shortages,” the steelmaker says. The Vaal Meltshop was originally scheduled to be placed under care and maintenance at the end of December 2020.
“We are employing all our resources to address the current steel shortages and the Vaal Meltshop will go a long way in addressing the low supply chain stock levels in the Long Products markets,” says AMSA chief executive Kobus Verster.
The Vereeniging site has been running at around 50% capacity in recent years. Pushing this 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 sections mill in Tshwane. It will also help reduce production requirements from the company’s Newcastle operations, which in turn will ensure more steel can be supplied to its long steel customers.
The Vaal Meltshop underwent extensive maintenance during December to ensure the plant remains reliable when production levels are increased. Full operation is expected to be achieved towards the end of February.
“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,” Vester concludes.
AMSA said earlier this month it anticipates supply-demand imbalance, as well as cost pressures, to result in some level of price support through 2021 (see Kallanish passim).