Steel demand is expected to remain supported through the end of 2020 in Brazil, with consumption from some sectors - and construction in particular - forecast to grow from 2019 levels, ArcelorMittal’s chief financial officer Aditya Mittal said on Thursday November 5.
“We see demand coming back in various sectors. And in some sectors, like construction in Brazil, we see full-year demand actually higher in 2020,” Mittal told analysts and investors during the company’s third-quarter earnings conference call.
“None of us have a crystal ball, but what we see in our business is reassuring,” he added.
ArcelorMittal Brasil, the company’s local branch, is the largest long steel producer and one of the top three flat steelmakers in the country.
It produced 2.3 million tonnes of crude steel during the third quarter, down by 13.8% from 2.67 million tonnes a year before, according to the earnings report published on Thursday. Steel shipments totaled 2.43 million tonnes in that same period, a 13.7% year-on-year decrease from 2.81 million tonnes.
The Brazilian steelmakers’ association, Aço Brasil, forecast domestic shipments from local producers – combining long and flat steel – would reach 18.22 million tonnes in 2020, or 3.1% lower than the 18.8 million tonnes reported in 2019. Apparent consumption is expected to total 20 million tonnes, a 4.7% drop from 20.98 million tonnes last year.
A stronger demand for long steel will offset a weaker market for flat steel, according to Aço Brasil.
ArcelorMittal had idled the No3 blast furnace at its Tubarão mill, in the southeastern Espírito Santo state, due to the adverse effects of the Covid-19 pandemic on the Brazilian economy, but restarted that furnace by the end of October. The No2 blast furnace, halted in June 2019 under tough market conditions, was reignited on July 26.
Brazilian steel demand, however, has grown at a much faster pace than supply after plummeting this year as a result of the pandemic, boosting domestic prices.
Source: SEAISA
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