Brazil's steel demand set to drop by 50% MOM in Apr
2020-04-10 16:52:16 [Print]
Brazilian Steel Institute recently said that the spread of COVID-19 in the country has harmed demand for steel which is set to decline by 50% MOM in April, and Q2 steel demand is expected to fall by 40% compared with the first quarter, with annual demand for 2020 to decrease by 20% YOY.
In 2019, Brazil's apparent steel consumption was 20.60 million tonnes, down by 2.7% YOY; crude steel production declined to 32.33 million tonnes, the lowest since 2016 (30.20 million tonnes).
Marco Polo de Mello Lopes, executive president of Brazilian Steel Institute said that steel demand is disappearing quickly with orders being canceled after the government announced national quarantine and lockdown, adding it is a very fast chain reaction and companies are now dealing with cashflow problems.
He hopes that economic activity would gradually recover on the premise of safety. As of now, Brazilian steelmakers' capacity utilization rate has dropped below 60%, and steel mills are studying on further production cut, which might lead to an additional decline in capacity utilization rate.
Lopes disclosed that the Institute is seeking to raise the tax rebate for steel exports from the current 0.1% to 5%, which means a 7% price advantage for related products when exported, so the country's steel exports are expected to increase by 20%.
Data released by the Institute shows that Brazilian steelmakers exported 12.8 million tonnes of steel products in 2019, down by 8.1% YOY.
In 2019, Brazil's apparent steel consumption was 20.60 million tonnes, down by 2.7% YOY; crude steel production declined to 32.33 million tonnes, the lowest since 2016 (30.20 million tonnes).
Marco Polo de Mello Lopes, executive president of Brazilian Steel Institute said that steel demand is disappearing quickly with orders being canceled after the government announced national quarantine and lockdown, adding it is a very fast chain reaction and companies are now dealing with cashflow problems.
He hopes that economic activity would gradually recover on the premise of safety. As of now, Brazilian steelmakers' capacity utilization rate has dropped below 60%, and steel mills are studying on further production cut, which might lead to an additional decline in capacity utilization rate.
Lopes disclosed that the Institute is seeking to raise the tax rebate for steel exports from the current 0.1% to 5%, which means a 7% price advantage for related products when exported, so the country's steel exports are expected to increase by 20%.
Data released by the Institute shows that Brazilian steelmakers exported 12.8 million tonnes of steel products in 2019, down by 8.1% YOY.
