According to forecasts announced by the Brazil Steel Institute, steel output in Brazil will increase by 5.8 percent this year to 36.51 million tons, due mostly to the recovery of the domestic economy.
Sales in the domestic market are expected to expand by 7.6 percent (totaling 23.25 million tons), which is considered "modest" by the Chairman of the Board, Albano Chagas Vieira.
Exports are positioned to total 8.94 million tons, equivalent to US$6.6 billion, representing a decrease of 8.8 percent in volume and 5.7 percent in revenue. Considering this data, steel would increase its production rate to about 75 percent of installed capacity, amounting to 48.9 million tons.
These forecasts are based on the official estimates of GDP growth of close to 3.7 percent, and would have to be revised downward if the Brazilian economy grows less, according Vieira. Further, the report stated that Brazil faces difficulties to compete in the market with other countries due to the loss of competitiveness of Brazilian steel by high taxes and the high price of the real in the foreign exchange market, among other factors. The corrugated steel tax burden is 36.2 percent in Brazil, 27.2 percent in Germany, while it stood at 19.8 percent in China, according to a study of Brazilian employers. Vieira suggested that the perfect quote for the sector would be about 2.4 per dollar for the Brazilian currency--it would have to drop by 19 percent from its current value (actual 2.015).