Bloomberg reported that Usinas Siderurgicas de Minas Gerais SA may scale back USD 9.2 billion in steel and iron-ore expansion projects because there’s already too much supply in global markets.

Mr Marco Antonio Castello Branco CEO of Usiminas told analysts on a call that Usiminas may cut in half planned output at a USD 5.7 billion steel slabs project in Brazil’s Minas Gerais state.

He added that annual capacity at the project called Santana do Paraiso may be reduced to 2.5 million tons from the previously planned 5 million.

Mr Castello Branco said that they will move ahead with an expansion of iron ore output to 10.5 million tonnes a year by 2011 and decide late this year if it’s necessary to further boost production to the planned 30 million tonnes by 2014. Usiminas produces 5.4 million tonnes now.

Mr Castello Branco said that “The world has changed. The last thing we need is new capacity.”

He added that if Santana do Paraiso goes ahead as planned, it may replace older capacity at the company’s Ipatinga plant.

(Sourced from Bloomberg.net)