BNamericas quoted Mr Jovito Martinez, a sector expert and the regional secretary of the Latin American Iron & Steel Institute, as saying that losing the Colombian market was a crucial factor for the Venezuelan iron and steel sector since it was a captive market, very solid and quite important.

According to Mr Martinez, losing Colombia plus the low production expected from state steelmaker Sidor because of the energy rationing program means the outlook for this Venezuelan industry in 2010 is less than positive.

In late January 2010, Sidor revealed that it would have to reduce its 2010 investment budget by 67.8% from the original USD 168 million to USD 54 million because of the impact the energy crisis has had on operations. This budget cut also means production goals will have to be lowered by 50%. The move puts total production expected for this year at slightly more than 2 million tonnes.

After Venezuelan President Mr Hugo Chavez made the decision to freeze commercial relations with Colombia, he also decided to stop exporting iron and steel products to the country and prioritize exports to Bolivarian Alternative for the Americas markets, which include Cuba, Bolivia, Ecuador, Nicaragua, Antigua and Barbuda, Dominica, and San Vicente and the Grenadines.

The Sidor plant is located in Ciudad Guayana and with liquid steel capacity of 4.2 million tonnes per annum is the biggest steelmaker in Venezuela.

(Sourced from www.bnamericas.com)