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MeneameBrazilian flat steel distributors are expected to have increased both purchases from mills and sales volume in October compared to the previous month, according to Christiano Freire, the CEO of local distributor Frefer.
For October. Freire estimated that flat steel sales amounted to some 330,000t, up 4% from 316,600t in September, while purchases from mills reached 328,000t compared to 313,000t in September, a 4.8% rise.
"Sales have rebounded well and numbers are at almost pre-crisis [pre-September 2008] levels," Freire said. "Demand has resumed and orders have been on the rise. We are seeing the return of major infrastructure projects that were put on hold during the crisis."
Freire also mentioned that prices will likely stay the same for the remainder of the year following a 10% increase in September.
"Since international prices are relatively low, we are not expecting to see any price increases [this year]," he said.
For 2010, Freire expects a more robust distribution market and said prices could rise.
"We will have a strong first quarter in 2010, possibly resembling 1Q08, one of the strongest quarters in the Brazilian steel industry's history."
In addition, Freire - a former president of steel distributors' association Inda - said inventories are relatively low and there is no excess supply, as he expects stocks to have dropped to 754,000t in October from September's 758,000t.
"Inventories are at about 2.3 months worth of consumption [compared to an average of 2.6 months], and distributors are having difficulties restocking," he said, adding that mills are having problems with production because of layoffs in the beginning of 2009.
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