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.
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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.