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Brazil’s galvanized steel use to grow 9.5%, ICZ says

Keywords: Tags  galvanizing production, galvanizing capacity, galvanized steel, steel demand, Carlos Gonçalves Henriques, ICZ, nonferrous metals institute, construction Felipe Feroni

SÃO PAULO — The market for hot-dipped galvanized steel products in Brazil is expected to grow 9.5 percent this year, according to Carlos Gonçalves Henriques, president of the country’s nonferrous metals institute, ICZ.

The use of zinc-coated steel, which is widely used in buidlings and structures subject to extreme environmental conditions, will rise from last year’s growth rate of 7.5 percent, he said.

The sector should maintain the same growth rate again next year, he added, boosted by increased demand in general construction, infrastructure projects and the oil and gas industry.

"Civil construction is very important for us, and we also have many public works to come," Henriques said.

Galvanizing companies have invested in output in recent years, reaching a "comfortable" capacity level, he said. Today, ICZ estimates the industry’s current galvanizing production capacity at 650,000 tonnes per year, up from 450,000 tonnes annually in 2011.

Executives from the sector are optimistic about the future, but have so far been disappointed by the lack of orders related to the construction of venues for the World Cup in Brazil next year.

"We had expectations, but didn’t get any sales related to stadiums," a source at a São Paulo-based galvanizing company said.

However, another source said the industry will see good momentum next year, with growing public investments ahead of the presidential elections.

"Normally, infrastructure (projects lead to an) increase in demand just before elections," he said, adding that he expects a growth rate of about 5 percent next year.

Brazil’s consumption of galvanized steel products is 1.6 kilograms per capita every year vs. as much as 20 kg each year in other countries, according to ICZ data.

In neighboring Chile, for instance, the rate is 8 kg per capita, ICZ added.

"It takes a cultural change to increase use of galvanized products, with more information about the products," Henriques said.

Galvanized products have a growing importance in industries requiring structures that are more resistant to corrosion, such as "in the oil and gas industry and in the construction of ports ... (where structures and machinery) face a very aggressive environment," he said.

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

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