Brazil’s Steel Consumption Is Expected To Decline in 2023

Brazilian Steel Association IABr has announced expectations that apparent steel consumption in Brazil will fall by 1.0% compared to 2022 to 23.2 million mt. The previous forecast published at the end of last year was 1.5% growth.

Marco Polo de Mello Lopes, CEO of IABr, said that activity in Brazil’s two most important steel consuming sectors, civil construction and machinery and equipment, is decreasing, while the automotive industry will increase production, not necessarily solid growth, as it compares to last year’s low base.

He mentioned that these three industries account for 82% of Brazil’s steel consumption. High interest rates, a shortage of credit lines and concerns about rising inflation were also cited as factors behind the negative outlook for 2023, according to the institute, the country’s crude steel production should increase by 2.0% to 34.65 million mt, steel product imports should increase by 2.5% to 3.4 million mt, and domestic sales should decline
0.7% to 20.1 million tonnes. At the same time, 2024 is expected to perform even higher, as Brazil is expected to reform its tax system, interest rates should fall, while the government is announcing infrastructure works and the official housing program is expected to accelerate until the end of the year.

Brazil’s annual crude steel production capacity is 51 million mt, but it grew by 64% in March, according to IABr.