Brazil’s steel institute, IABr, said local steel output in 2016 should decline 6.8 percent, year-on-year, to 31 million mt, while domestic steel sales in the same period should diminish 10 percent to 16.4 million mt.
Apparent steel consumption in 2016 is projected to total 18.2 million mt, 14.4 percent down, year-on-year, reaching 2006’s levels.
The local steel association said during the Brazil Steel Congress held in Sao Paulo last week that this is the segment’s worst crisis ever; total layoffs for H1 are expected to reach 11,300 workers with a total of five blast furnaces idled.
As for the short-term, IABr said exports are the “only way” to help Brazilian steelmakers raise capacity utilization, which is currently at about 60 percent.
Despite viewing the export market as a competitive alternative to help the local steel industry to cope with the crisis, IABr noted the segment faces high financial costs and has difficulties in reaching fiscal credits, affecting the steelmakers’ export revenues.