Brazil’s long products market should face a challenging year in 2015, despite a low increase in production, domestic sales and as well as in the country’s apparent consumption, an executive at Gerdau said during the Alacero conference, held November 9-11 in Mexico City.
According to Andre Gerdau Johannpeter, CEO at Gerdau, Brazil is not growing. Among the reasons the country is not performing well, he cited the low rate of investments, which do not reach 18 percent of the country’s GDP, the heavy tax system, a weak Real, as well as an expensive and inefficient infrastructure for logistics.
Other factors include the nation’s deindustrialization, as well as heavy social and labor costs. With the local economy facing so many challenges, long steel production in 2014 decreased more than the long steel industry first forecast.
Local production was expected to decrease in 2014 by 2 percent, while domestic sales and the country’s apparent consumption were thought to reach a 3 percent decrease, respectively.
However, those numbers reached much higher percentages. From January to August, local production decreased 4.8 percent, while domestic sales and the apparent consumption reached a 7 and a 6.2 percent decrease.
For 2015, local production, domestic sales and the apparent consumption are expected to increase by 3 percent to 11.3 million mt; 1.4 percent to 9.9 million mt and 1 percent to 11.6 million mt, respectively.
Johannpeter said the country’s capacity utilization reached its lowest level since 2005.