The Brazilian steel institute, IABr, unveiled expectations of a 1.0 percent decline in apparent steel consumption in Brazil, to 23.2 million mt in 2023 compared to 2022. The previous forecast, unveiled late last year, was for a 1.5 percent increase.
According to Marco Polo de Mello Lopes, executive president of IABr, two of the most important steel consuming sectors in Brazil, civil construction and machinery and equipment, are showing reduction of activities, while the auto industry will increase production, not necessarily a solid gain, as it is compared to the low base of the previous year.
He mentioned that these three sectors respond for 82 percent of the steel consumed in Brazil.
High interest rates, the shortage of credit lines and fears of an increased inflation, were also mentioned as factors behind the negative perspectives for 2023.
According to the institute, the country’s crude steel production should increase by 2.0 percent to 34.65 million mt, imports of steel products should increase by 2.5 percent to 3.4 million mt, and domestic sales should decline by 0.7 percent to 20.1 million mt.
Meanwhile, a higher performance is expected for 2024, as Brazil is expected to have a reform of its tax system, interest rates should decline, while infrastructure works are being announced by the govern, with the official housing program expected to accelerate until the end of this year.
Brazil has a yearly crude steel production capacity of 51 million mt but has operated at a 64 percent pace in March of this year, according to IABr.