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Steel Production

In May, steel production in Brazil reached 3.1 million tonnes, says Aço Brasil

06/18/2021 | 12h38

The Brazilian production of crude steel, in May, reached 3.1 million tons, the highest since October 2018. In the accumulated from January to May 2021, production reached 14.9 million tons, which represents an increase of 20.3% compared to the same period of the previous year, the highest in the historical series.

 

In May, domestic sales reached 2.1 million tons, representing a growth of 73.9% compared to May 2020. The apparent consumption of steel products, in May, was 2.5 million tons, showing growth of 83% compared to the same period in 2020. The strong growth of these indicators was influenced by the basis of comparison with May 2020, which was the second most critical month of demand crisis caused by the COVID-19 pandemic, strongly impacting not only the steel industry, but the entire manufacturing industry.

 

Domestic sales, in the first five months of this year, were 10 million tonnes, representing an increase of 46.4% over the same period last year. The apparent consumption of steel products, in the first five months of this year, was 11.5 million tons, accumulating an increase of 50.7% compared to the same period in 2020, the highest volume since October 2013.

 

These data show that the Brazilian steel industry is producing and placing more steel on the domestic market than was being demanded before the pandemic. The current demand can be explained not only by the resumption of the main consumer sectors, but also by the formation of defensive stocks in some segments that want to protect themselves from a scenario of market volatility. Volatility is caused by the worldwide movement of boom in commodity prices. Almost all inputs and raw materials, especially iron ore and scrap, continue with significant price increases, causing a strong impact on production costs in the steel industry.

 

There is no exceptional situation in the domestic steel market. The supply is normalized and the steel companies are in a production rhythm higher than that verified in the period before the beginning of the Covid pandemic in the country.

 

Aço Brasil is also releasing today the Steel Industry Confidence Indicator (ICIA), for the month of June. The ICIA retreated 7.3 points compared to the previous month, to 63.8 points. This drop occurred after two months of growth in the indicator. Even so, the ICIA remains 13.8 points above the confidence dividing line of 50 points and 2.6 points above the historical average of the indicator (61.2 points), started in April 2019.



Font: T&B Petroleum/Press Office
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