Steel producers in Brazil are expecting a modest expansion of production, sales, and apparent consumption in the country in 2023, following “excellent” years for the industry, according to Aço Brasil Institute.
Brazilian crude steel production in 2023 is projected to rise 2% on year to 35.3 million mt. Sales volumes in the domestic market may grow 1.9% to 20.6 million mt. The expectation for apparent consumption is 23.7 million mt, up 1.5%, the group forecast.
The chairman of the board of Aço Brasil and also the president of ArcelorMittal Brasil, Jefferson de Paula, mentioned during a press conference Nov. 30 that the civil construction GDP should increase between 1.5% and 2% next year, while capital goods should grow 0.5%-1% and the automotive industry should produce between 5% and 6% more vehicles than 2022.
“We see that infrastructure projects, privatizations that were carried out, plus what was launched in housing….should start the execution phase next year”, said De Paula about the bases for the projections for steel consumption.
Still, the year is expected to be “challenging” amid the ongoing recession fears, high inflation and tax rates, plus soaring energy prices denting steel consumption globally, according to Marco Polo de Mello Lopes, Aço Brasil’s executive president.
After 2023, De Paula’s assessment is that apparent steel consumption in Brazil should grow by an average of 3.5%-4% a year. However, the global steel market should “walk sideways” in consumption, but the costs of raw materials such as coking coal, coke, iron ore, pig iron, and scrap should retreat “slightly compared to this year.”
For 2022, Aço Brasil expects crude steel production to drop 4% on year (34.6 million mt), sales in the domestic market to contract by 9.5% (20.2 million mt) and apparent steel consumption is projected to plunge 11.4% (23.2 million mt) on the year-on-year comparison.
“The reductions are due to a strong basis of comparison with 2021—in which the sector showed the best performance in a decade,” Mello Lopes said. He claimed that 2022 was the fourth best year of the last decade, surpassed only by 2021, 2014, and 2013.
In contrast, exports of finished steel products from Brazil may record a growth of 12.3% to 12 million mt in 2022, favored by the foreign exchange and lower domestic sales in the second half of the year.
Imports, in turn, should plunge by 34% in 2022 to 3.28 million mt and increase slightly 2.3% in 2023.
The sector’s investment plan between 2023 and 2026 is of Real 40.6 billion ($7.80 billion) after Real 11.9 billion disbursed this year. Lopes stated that the funds are being applied to modernize facilities to reduce production bottlenecks and improve the product mix, with local steelmakers betting on the sale of value-added products such as special and coated steels.
Post time: Dec-05-2022