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21. June 2012

BRASIL - Gerdau CEO flags slowdown in Brazilian steel demand growth

Reuters cited Mr Andre Gerdau Johannpeter CEO of Gerdau SA as saying that Brazilian steel makers face slower demand growth than expected as they struggle with higher costs and growing imports.

He, on the sidelines of AMM's Steel Success Strategies conference in New York, told Reuters “Brazil steel consumption should grow by around 4% this year. It is not as much as we expected, but it is still some growth while the crisis in Europe is a real concern for the industry.”

He said “"The dynamics have changed in Brazil in the last years as the currency had a major impact on the competitiveness of the industry. Weak steel demand in other regions is boosting exports to Brazil while the steep appreciation of the real against other currencies has hurt Brazil's ability to produce low cost steel.”

Mr Johannpeter said “Brazil went from being very competitive to losing its cost efficiency. On top of that we see more imports of steel and steel products.”

He called on the government to help domestic steelmakers by increasing infrastructure spending and lowering taxes, which he said are a higher than those in many other countries. He said “The government should also make sure we have a level playing field to compete with other producers around the world. We want players who export steel to Brazil to have the same rules as us.”

While his estimate is below expectations, it is slightly above global forecasts. The World Steel Association has predicted global consumption will grow by 3.6 percent to 1.422 billion tonnes this year.



Source - Reuters

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