Brazil’s steel sector has posted a surprising recovery leading the Instituto Aço Brasil (IABR) to revise its steel production and consumption forecast for 2020. IABR has revised Brazil’s steel production forecast for 2020 to be down by 6.4pc from the earlier negative 13.4pc forecasted in July. Apparent steel consumption is forecast to be lower by 4.7pc in 2020, up from negative 14.4pc forecasted earlier.
The country is expected to produce 30.49mn mt steel in 2020 as mills have returned to pre-COVID levels of activity and are operating at 63pc of the installed capacity of around 58mn mt, said Executive president of Aço Brasil, Marco Polo de Mello Lopes.
At the same time, consumption forecast revision is backed by strong recovery of the market, primarily in civil construction accounting for 37.6pc of the steel consumption. Capital goods and automotive industry account for 20.5pc and 24.1pc of the country’s steel consumption, report said.
Of the 13 blast furnaces which were shut due to the pandemic, seven are operational and six are still shut. The country is likely to utilise 70pc and 75pc of the capacity between the end of this year and the beginning of 2021.
With a strong recovery, the country has witnessed a growth in steel demand and therefore has revised the drop in domestic sales to 3.1pc or 18.3mn mt from the previous estimate of 12.1pc. Exports are likely to decline by 10.7pc to 11.44mn mt, as against a 14.4pc drop estimated earlier. The drop in imports is revised to 23.1pc or 1.81mn, compared to the previous forecast of down by 34.8pc.