Brazil steelmakers plan big investments on improved confidence

Confident in Brazil's economic recovery, local steel association IABr earmarked US$9bn in investments for the steel industry over the next five years.

IABr said in a statement that it sees Brazilian steel consumption growing 2.1% this year.

Furthermore, the association expects a 2.5% increase in domestic steel sales this year, totaling 19.4Mt. Steel production is expected to remain stable, with a slight increase of 0.4% to 35.6Mt. 

Exports are forecast to drop 7.3% due to adverse international market conditions and local steelmakers' diminished competitiveness as a result of cumulative export taxes, IABr outlined.

On the macroeconomic front, the association believes that political and economic issues and measures being discussed in congress will improve conditions related to competitiveness for the manufacturing industry as a whole, bringing investments to infrastructure, construction, and oil and gas projects.

"Another major challenge for the Brazilian steel industry is the regularization of iron ore supply to the sector, in quantity and quality required by the companies' mills and ensuring minimum predictability," IABr said.

OUTPUT

Brazilian crude steel production fell 1.4% year-on-year to 17.2Mt during 1H19, while domestic steel sales increased 1.3% to 9.24Mt, the trade group said.

Imports dropped 0.6% to 1.26Mt. Apparent steel consumption was 10.4Mt, rising 0.2% from a year ago.

Home to steelmakers such as Gerdau (pictured), Usiminas, CSP and CSN, Brazil is Latin America's biggest producer.