May 17, 2010 - Venezuelan producer Sidor saw its production of liquid steel drop by 63.5% to 308,000 tonnes during the first quarter, compared to the same period in 2009.
The works are currently producing at a monthly rate of 100,000 t with a projection of reaching 600,000 t for the first half of the year and then rising in second half year to reach a total of 2.1m t for the year, the lowest output level in a decade.Sidor's production is still at low levels despite promises of imminent reactivation, but the nationalized steelmaker continues to import material it needs to operate, causing friction with domestic suppliers.
According to local reports, the country's main refractory producer Calderys de Venezuela is requesting that the government stop encouraging Sidor to import refractories to support its output.
Sidor started importing refractories last year to maintain output levels in support of other state-owned companies. Calderys, a private company, used to supply most of Sidor's refractory material, but after experiencing production and debt problems of its own this were halted.
"We now have more than enough material in our stocks to supply the steelmaker; therefore our ties should be renewed," explained a Calderys representative. "Importing refractory material is more costly for Sidor." He added imported material can have reduced effectiveness after exposure to humid and damp conditions in transit, in addition to being fragile.
However, steel distributors insist that Venezuelan mills in general still need to import material to support even low output levels.
