Problems in S.America continue, while Brazilian mills receive good news

Problems in S.America continue, while Brazilian mills receive good news

The steel consumption figures in Latin American markets emphasize a stable trend despite some political and economical issues. Brazilian government had decided to cut interest rates by 2% to 20%. Subsequently, the Brazilian producers expect the local market to firm up as inventory levels of the customers are already low in the country. Obviously once the market starts firming up, the export availability of steel products from Brazil will be decreased. CSN has been offering reportedly very aggressively in the region, but that could change according to developments in local market. The discovery of natural gas resources close to Bolivian and Chilean borders are very important for the region. Investments are expected to boom as a consequence. Elsewhere, the economical situation looks more or less fine in Colombia. Reports confirm that the economical targets of the IMF agreement are met only with a slight deviation in inflation. Even though the news from Colombia are promising, we can not say the same for Venezuela or Peru. The political situation in Venezuela is still very much uncertain. Inflation keeps rising in the country and expected to beat 35% mark by year end. The Peruvian government, on the other hand, has been trying to enter the Mercosul, whilst trying to run the country under tight fiscal constraints. There are some more good news in the market for Brazilian steel producers. Chilean authorities have reduced the import duty on Brazilian material recently. The new duty is 1.2%, whereas the previous was 1.8%.