The Brazil Steel Institute (BSI) announced that the steel output in Brazil is expected to increase by 5.8% this year to reach 36.51M tonne, mostly due to the recovery of the domestic economy. Domestic market sales are expected to expand by 7.6% (totalling 23.25M tonnes)—a “modest” increase according to the Chairman of the Board, Albano Chagas Vieira. Exports, however, are positioned to total 8.94M tonnes, equivalent to USD 6.6B, representing a decrease of 8.8% in volume and 5.7% in revenue. Considering this data, the steel production rate would increase to about 75% of installed capacity, amounting to 48.9M tonnes.
These forecasts are based on the official estimates of a GDP growth of approx. 3.7%, and would have to be revised downward if the Brazilian economy grows less, according Vieira. Further, the report stated that Brazil faces difficulties in competing with the other countries in the market due to high taxes and the high price of the real in the foreign exchange market, among other factors. The corrugated steel tax burden is 36.2% in Brazil compared with 27.2% in Germany and 19.8% in China, according to a study of Brazilian employers.
