Brazilian crude steel output jumps 45% on year in June: Aco Brasil

Brazil’s crude steel production in June advanced 45.2% on the year to 3.12 million mt, according to industry institute Aco Brasil on July 22.

From January to June, the production rose 24% on the year to 18 million mt.

Finished steel shipments to the domestic market increased 32.8% on the year, or about 44% in the first half, to 2.86 million mt.

The data showed a rise of 41.1% in consumption of steel products in June at 2.486 million mt from last year.

Furthermore, imports of finished steel totaled 420,177 mt in June, 124.9% more than the same period of 2020. On the other hand, sector exports were down 14.1% to 916,000 mt.

“The entire production chain suffered a shock in April. We saw the rock bottom, but as of June we were already supplying the domestic market,” said the Aco Brasil’s President Marco Polo de Mello Lopes.

Lopes shared the new per capita consumption projections for steel products in the country for 2021, which stood at 123.6/kg as against 100.9/kg in 2020.

He also announced the value of new investments in the steel sector until 2025 at $8 billion. From 2008 to 2020, Brazilian mills invested $28.2 billion.

For the institute, crude steel production in July should increase 14% on year, as well as domestic sales (18.5%), imports (119%) and apparent consumption (24.1%), all compared to July 2020.

‘Out of reality’

The Aco Brasil data announcement took a different tone this month.

Lopes said that the narratives made by the local civil construction sector in recent months, specifically by CBIC, that Brazilian mills have delayed the shutdown of their blast furnaces, exponentially increasing exports with the aim of reducing supply and increasing pricing in the domestic market do not correspond to reality.

For him, the construction players aimed only at lowering the import tariff. And he called a myth the idea that steel prices hamper the growth of the sector.

In a study carried out in partnership with the Fundação Getulio Vargas, the institute showed that the impact of rebar inflation in the last 12 months until June 2021 would be only 0.177 percentage points.

“The weight of rebar in the basket of essential inputs for the sector would be just 0.2097 percentage points,” the executive said.

And he added, “supplying the domestic market is an absolute priority for the mills, following free market rules. Imports are being carried out normally without the need to reduce the tariff.”

Last week, a misunderstanding with the Brazilian economy minister Paulo Guedes shook the market. According to Guedes, the steel sector would have committed to keeping prices stable in the second half, given the importance of the input for other sectors. Aco Brasil denied such claim.

— Mayara Baggio