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The restart of the primary production areas of steelmaker Usiminas' Cubatão plant, in São Paulo state, depends on a stronger recovery in the Brazilian economy as a whole, according to company CEO Sérgio Leite.
"Improved economic conditions weigh on a decision to restart Cubatão. We will reactivate blast furnace No. 1 at the Ipatinga plant in April, with an estimated 600,000t added capacity, but Cubatão will be kept on hold," Leite told reporters in a call to discuss the company's latest earnings release.
"But we will continue to evaluate a resumption of operations with a better economic scenario," the CEO added.
The company halted production at Cubatão in January 2016, ending output of crude steel to focus on rolled steel. Ipatinga's furnace was turned off in June 2015 as a cost-cutting measure intended to bring output in line with demand.
The company's mining arm, Mineração Usiminas (MUSA), is expected to ship 3.0-3.5Mt of iron ore in 2018 Leite said.
"But we're keeping our eyes on the market to decide on a possible increase in iron ore shipments. Foreign exchange is an important factor as is the maritime freight. With a higher level of stability we can revise this position," the CEO added.
MUSA produced 3.96Mt of iron ore during 2017, compared with 2.75Mt in 2016. Iron ore sales jumped to 3.68Mt from 3.21Mt.
Usiminas reported net income of 315mn reais (US$95.2mn) for 2017, compared to a loss of 577mn reais the previous year. Revenue increased to 10.7bn reais from 8.45bn reais.
The Minas Gerais-based company, Brazil's second largest steelmaker, has been suffering recently with demand-side disruptions, plant shutdowns, lower apparent consumption and red tape hindering exports.