Flat rolled steel inventories of distributors in Brazil fell 6.3 percent in June from the prior month, Brazil's National Institute of Steel Distributors (INDA) said Tuesday.
Inventory levels declined to about 846,000 mt in June, from about 905,500 mt in May, INDA said. Brazilian distributors' flat rolled inventories were 2.8 percent higher in June 2009 than in June 2008, however. This figure peaked in March, at 950,500 mt.
INDA explained, "Despite remaining at levels above historical averages (of 2.6 months), inventory turnover ratios now at 3.1 months are on the decline.”
The improving flat rolled inventory figures are likely a result of the recent pick-up in Brazil's automotive sector, which is due largely to tax incentives provided by the Brazilian government. According to figures from the national automakers' association, Anfavea, automobile production in Brazil fell 3.6 percent in the first half of the year compared to the same period in 2008, although sales of domestically manufactured vehicles increased in the period, rising four percent compared to the first half of last year. Accordingly, Brazil's auto production started to trend upward again in May and June, and Anfavea says that sales from Brazilian automakers are now on pace to reach three million units, which is 6.5 percent above last year's sales figure.
Usiminas, the biggest supplier of flat rolled steel to Brazil’s automotive industry said earlier this month that it plans to restart the blast furnace at Ipatinga, which was switched off late last year, by the end of July, and the Cubatao furnace by the end of August.