Brazilian steel imports mark 78% year on year increase

The Brazilian steel market is grappling with low demand this year. The figures for July, unveiled by the Instituto Aço Brasil on Monday (14), confirm the trend of contraction in domestic sales by steelmakers, indicating a decline of 8.4% compared to the volume sold in the same period the previous year.

Adding to the complexity of this situation, imports have surged due to plummeting steel prices overseas. This has made it viable to procure steel inputs from countries like China, South Korea, Russia, Turkey, and even Japan.

Imports experienced a notable surge of 78.5% last month compared to the same time last year, reaching 481 thousand tonnes. This surge has significantly concerned domestic steelmakers. Over the course of the year,  imports have surged to 2.69 million tonnes, reflecting a substantial 48.4% increase compared to the same period last year.

The chart below shows Brazil’s steel imports (hs codes 72 and 73) between Jan 2019 and Jun 2023, according to the DataLiner market intelligence service.

Brazilian steel imports | Jan 2019 – Jun 2023 | TEU

Source: DataLiner (click here to request a demo)

As if the challenge of countering imports, causing price cuts and margin squeezes,  wasn’t already significant enough, exports of semi-finished products (slabs and billets) and rolled materials fell 13.8% in July. There was a 6.2% decrease from January to July, totaling 7.08 million tonnes.

As reported by Aço Brasil, crude steel production also contracted by 4.7%, affected by the market recession and the Usiminas blast furnace undergoing renovation. The monthly volume reached 2.71 million tonnes. In the first seven months year-to-date, production amounts to 18.61 million tonnes, marking a decline of 8.6%.

Given this trend, it’s increasingly likely that crude steel production will be capped at a maximum of 32 million tonnes, representing a second consecutive year of contraction.

As an outcome, the steel industry in Brazil observed a decrease in the utilization of its installed capacity, which went from 67% to 63.9% in July, reflecting a notable decline. Capacity utilization is currently at 62.6% on an annual basis, well below the 80% threshold considered healthy for the steel industry.

Source: Valor Econômico

Read more at: https://valor.globo.com/empresas/noticia/2023/08/15/importacoes-de-aco-avancam-78percent-em-julho-segundo-aco-brasil.ghtml

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