The Brazilian steel industry touched a record level by producing 33.784 Million Metric Tons steel last year and IBS is expecting same trend to continue in 2008 as well.
According to the Brazilian Steel Institute (IBS) on January 25, 2008, the production of steel touched a record high in 2007, as reported by fxstreet.
The crude steel production in 2007 was 33.784 Million Metric Tons, which was up by 9.3% from 30.901 Million Metric Tons of 2006. Nevertheless, the production was below from year end- projections of the trade group that forecasted 9.9% increase, equivalent of 33.958 Million Metric Tons in December 2007. Despite that, the hike is remarkable, according to IBS.
Rise in production and economic growth drove the demand of steel in Brazil as well as in the international market. Boom in the construction industry of Brazil increased the demand for long steel products and their sale increased by 18.5%, equal to 7.714 Million Metric Tons.
The expansion plans at Tubarao unit of ArcelorMittal and at Acominas of Gerdau would further push the production of crude steel. With the accomplishment of both the projects, the production of steel would touch a new high.
The automobile and civil construction industries of Brazil saw strong growth in 2007, as a result, the demand for steel products increased throughout the year. Both industries were responsible for 60% sale of Brazilian steel last year.
All these reasons will translate into an exceptional 2008 in terms of production of steel, according to IBS. Moreover, IBS expected that the production of steel would touch 37.637 Million Metric Tons in 2008, which would be 10.8% higher than 2007 projection.
High competitive prices are attributed to strong expansion plans in the Brazilian steel production. The benefits of competitive prices extended to the whole process of steel production from sintering to cold rolling. Another reason for high production of steel is abundance of high quality iron ore and integrated logistics that includes lesser distance between sources, refining plants, ports and the consumption centers.
According to a Senior Research Analyst at RNCOS, “The Brazilian steel industry is on rise and is growing at a rapid pace. All the associated sectors, including construction and automobile, are contributing in the production of the crude steel. To meet the escalating demand for steel in Brazil, the steel industry has to explore new scope and areas for further growth. The government has to give complete support to the industry by formulating policies that encourage foreign direct investment in the industry.”
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