Can Brazil live up to its steel powerhouse billing?

Aug 21, 2008 | 11:39 AM |

Tough competition, environmental pressures and rising costs are posing some hard questions for steel producers about where to site new greenfield projects. Mills looking for a favorable economic and political environment and, crucially, access to raw materials are increasingly turning their attention to Brazil.

The steel sector in Brazil looks set to surge on the back of strong domestic and international demand. The Instituto Brasileiro de Siderurgia (IBS), Brazil's steel institute, said in May that consumption of steel products in the country is expected to nearly double to 40 million tonnes by 2015 from 22 million tonnes in 2007. IBS also estimated that investments of about $32.9 billion should increase the country's steelmaking capacity to 63 million tonnes by 2013 from 41 million tonnes last year.

But can Brazil take on all of the new projects being planned within its territory? The answer is most likely yes. The country's major advantage is access to plentiful, high-grade iron ore reserves, something which few other steelmaking nations can boast. Brazil also has an extensive coastline, making export business much easier.....

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