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Brazil steel upbeat on next year, dims ’12 view

Keywords: Tags  IABr, Brazil steel institute, steel output, steel comsumption, Chagas Vieira, Marco Polo de Mello Lopes, steel imports, Ana Paula Camargo

SÃO PAULO — Brazil’s steel industry looks set to pick up next year, domestic steel association IABr said, but lowered its 2012 forecasts.

In 2013, mills’ steel sales are expected to return to 2008 levels as federal economic stimulus measures are seen lifting local consumption. Sales should rise 7.7 percent to 23.39 million tonnes in 2013, IABr president Albano Chagas Vieira said, and steel consumption is seen rising 4.3 percent to 26.4 million tonnes.

"We are optimistic about 2013," he said, citing a favorable currency rate, trade defense tools and the correction of some "tax asymmetries."

Meanwhile, IABr cut this year’s industry forecast due to global economic deterioration and a weak local market.

Apparent steel consumption is expected to total 25.3 million tonnes, down from a June estimate of 26.37 million tonnes, and crude steel output is expected to reach 34.8 million tonnes, down from June’s estimate of 36 million tonnes.

The new estimates represent a 1.1-percent drop in output compared with last year but a 1.1-percent increase in consumption, IABr executive president Marco Polo de Mello Lopes said during a press conference.

IABr also cut its 2012 domestic steel sales forecast to 21.71 million tonnes from 22.95 million tonnes previously, but still 1.3 percent higher than last year, and trimmed its export forecast to 9.7 million tonnes from 10.92 million tonnes, down 10.9 percent from 2011 exports.

"Brazil’s steel mills reported a utilization rate of only 72.5 percent in 2012," Lopes said, citing a weak local market and higher imports, compared with an average capacity utilization rate of 73.6 percent last year.

Steel imports in 2012 are expected to rise 0.9 percent to 3.8 million tonnes vs. a previous forecast of a 3.8-percent drop to 3.64 million tonnes.

A version of this article was first published by AMM sister publication Steel First.

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