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Aço Cearense in talks to acquire CSP slab production

Bnamericas Published: Tuesday, November 19, 2013

Brazilian steelmaker Aço Cearense is in talks with the Companhia Siderúrgica do Pecém (CSP) steel mill to acquire the entirety of the latter's steel slab production intended for the local market, local press reported.

As CSP is currently being built in Pecém's new processing zone, it is legally authorized to allocate only up to 20% of its planned production of 3Mt/y steel slabs to the local market. As a result, the new rolling mill would receive 600,000t/y of the company's steel slabs.

On November 13, Cearense signed a memorandum of understanding with South Korean company Posco to carry out feasibility studies for an US$800mn steel rolling mill in Pecém.

Aço Cearense's mill is expected to produce 700,000t/y of cold rolled and hot dipped galvanized steel coils in its first phase and can be expanded to produce 1Mt/y in phase two.

"We're already in talks with CSP to become the company's sole buyer in Brazil," Cearense VP Ian Corrêa was quoted as saying.

Cearense is based in Caucaia, Ceará state and has recorded a 10.5% production increase during the first eight months of the year compared to the same period in 2012.

Brazilian mining giant Vale (NYSE: VALE) holds a 50% stake in CSP, Korean steelmakers Dongkuk owns 30% and Posco, the remainder.

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