The recovery of Brazil’s steel sector will depend much on the actions of recently appointed president Michel Temer, who assumed the office on Wednesday following the impeachment of suspended president Dilma Rousseff.
Rousseff was ousted from office on Wednesday for 60 votes out of a total of 54 needed votes, which resulted in her condemnation for manipulating fiscal figures and committing crime of fiscal responsibility.
In a letter sent to SteelOrbis on Wednesday, Brazil’s steel distributors association, Inda, said it is “optimistic” regarding the new president.
“The steel [sector] is one of the main levers to a country’s development and no businessman feels confident in promoting investments when the government doesn’t give clear signs of its intentions,” the letter said.
“We don’t expect fancy transformations in the economy as well as in politics in the short-term. If it stops to get worse, then it’s a good start.”
Carlos Loureiro, president of Inda, told local media the effects related to the change of government should be felt by the next year.
The executive told a local newspaper there were investments in Brazil, which were “on hold” mode due to the political uncertainty, however, indications that those resources and investments are getting back on track would mean a retake for local steel demand over the time. It will all depend on the actions the new government will take, he said.
“Even if a retake takes a lot of time to happen, there’s money, which is not being invested,” he said.
Loureiro argued a final decision over who’s going to be the president for the next few years ousts certain uncertainties and improves the perspective for the sector’s recovery.