The steel market in Brazil is operating at a slower pace in 2022

The steel market in Brazil expects to see a sharp slowdown in the pace of imports of finished steel products this year. Analysts say that steel consumption has cooled down in the country in response to a weakened Brazilian economy, high inflation, and elevated interest rates. Besides, the dollar’s volatility makes importers more cautious about their purchasing decisions.

According to industry representatives, imported materials have taken up to 180 days to arrive in Brazil. “Imports will fall for sure,” says an executive.

The total apparent consumption (the sum of domestic sales plus imports), including all types of steel, mainly flat and long steel products, is up 1.5% in 2022, according to Instituto Aço Brasil.

According to current assessments, the sector with the weakest demand lies in the automobile industry, mainly affected by the lack of chips. On the other hand, despite this problem, agribusiness activities continue spurring high demand, especially for trucks, agricultural machinery, and farming implements.

Other factors that may inhibit the entry of foreign steel into the country are the war in Ukraine and the Covid-19 issue in China. At the moment, China, with its production and logistics chains affected by measures against the coronavirus, is favoring the domestic market.

The Chinese steel industry is the largest exporter of finished steel products to Brazil, accounting for more than half of the flat material entering the country. Russia was also a relevant supplier.

According to Aço Brasil, domestic sales dropped 19.7% and apparent consumption by 17.7% in the year’s first quarter. The strongest impact was felt in March. At the same time, exports of laminated and semi-finished products registered an increase of 28.3% in the period.

Still, according to Aço Brasil, flat steel imports increased by 5.3% in the first quarter, totaling 544.8 thousand tonnes. In turn, long steel products fell by 17.1%, to 268.9 thousand tonnes from January to March. As a result, steel imports overall showed a decrease of 3.4% in the period.

See below the track record of Brazilian imports of iron and steel products (HS 7325 and HS 7326) from January 2021 to March 2022. The data is from DataLiner.

Imports of cast items and other iron and steel products into Brazil | Jan 2021 – Mar 2022 | TEU

Source: DataLiner (click here to request a demo)

After a 144.2% increase in steel imports last year compared to 2020, with a total of 4.97 million tonnes, the organization of domestic producers projects a 12% decline. Strong local demand and supply chain disruption caused by Covid-19 led to import increases between July 2020 and June 2021.

Aço Brasil forecasts the volume of imported steel to reach 4.38 million tonnes — 16.3% of the apparent consumption projected for the year.

Source: Valor Econômico

To read the full original article, please go to:

https://valor.globo.com/empresas/noticia/2022/05/03/perspectiva-para-importacao-de-produtos-siderurgicos-em-2022-e-de-desaceleracao.ghtml

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