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Colombia's $16 billion 4G infrastructure project not yet demanding steel

Sao Paulo (Platts)--12 Jul 2017 533 pm EDT/2133 GMT


Colombia's Fourth Generation infrastructure project hasn't started to demand steel yet, while market players expect demand to increase for 2018.

The first phases of the program -- 1G, 2G and 3G -- which started in 2011 and had investments of $7.5 billion, didn't require much steel. The expectation was for the fourth part of the project -- 4G -- to demand more steel products, sources said.

According to the Infrastructure National Agency, the $16 billion 4G program was expected to begin in 2016 and last eight years.

It is funded by public-private partnerships and privately owned infrastructure groups. The total invested since 2011 is $14 billion, while another $12.4 billion is expected through 2018.

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"However, not much has been seen except from contracts and investments expectations," said Camila Toro, executive director of Andi, the country's steel association.

"Maybe for 2018 we may see the beginning of some infrastructure works, but 4G so far hasn't started yet," Felipe Gonzalez, CEO of Colombian flats rolling mill Acesco.

The 4G project is expected to boost the country's steel consumption, currently at 4 million mt/year.

"An additional demand of more than 900,000 mt/year is expected," a source said.

The 4G project's top initiatives include building and improving over 8,000 km of roads around Colombia, in addition to construction at airports, ports and rails.

Colombia has six long steel producers: Votorantim's Paz del Rio unit, Gerdau Diaco, Acasa, Sidoc, Sidenal and tubes producer Tenaris TuboCaribe.

Acesco has a flat rolling mill in the country.

--Guilherme Baida, guilherme.baida@spglobal.com

--Edited by Jason Lindquist, jason.lindquist@spglobal.com




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