Brazilian sales of flat steel are expected to slow down this year, steel distributors said recently.
Brazil distributor association Inda said domestic sales of flat steels reached 2.5 million mt from January to July, reflecting a 1.9 percent decrease year-on-year, and the growth of sales for the product within the domestic market was downgraded to 1 percent from 4 percent as a result of a weak demand.
Additionally, Inda said mills are struggling with smaller orders and distributors are fearing that weak demand for plates and slabs could lead to more unwanted inventory, unless activity improves.
One of the factors affecting the Brazil steel industry is the bad performance of automakers and machinery manufacturers, which would be affecting sales and margins for distributors.
According to Carlos Loureiro, president at Inda, unwanted inventory remains too high at current levels. Despite a lack of demand, Loureiro does not see room for potential price reductions.
“It would be useless--you can cut prices for a number of products but I don't see demand reacting at all," he told media.