October 08, 2008

Brazilian steel sector riding on bullish domestic demand

The Brazilian Steel Institute announced that Brazilian steelmakers produced 2.960 million tonnes of crude steel in March 2008 up by 6.3% YoY as compared to 2.785 million tonnes in March 2007.

Brazilian production of rolled steel products also increased by 1.6% YoY to 2.213 million tonnes as compared with 2.178 million tonnes in March 2007 as output of long steel products continued to grow but flat steel production slipped slightly in March. In March, long steel output reached 896,300 tonnes up by 11% YoY whereas flat steel production tumbled to 1.316 million tonnes in March down by 3.8% YoY.

IBS said that strong demand from the civil construction industry and a surge in infrastructure projects has fueled demand for long steel products in Brazil but the flat production slumped despite strong demand from automobile and the oil, gas and naval sectors.

March domestic sales increased by 13% YoY to a record 1.922 million tonnes as compared to 1.697 million tonnes in March 2007. Domestic rolled steel sales jumped by 13% YoY to 1.858 million tonnes and sales of semis surged by 30% YoY to 63,900 tonnes.

March export sales continued a recent string of declines, which started last year as local steelmakers shifted production to meet local demand. Export sales dipped by 2.3% YoY to 867,900 tonnes in March 2007.

In 2007, Brazil produced a record 33.784 million tonnes of crude steel up by 9.3% YoY as compared to 30.901 million tonnes in 2006.