Increase on the sales of steel in the Brazilian market
After two years of continuous decrease in the sales of steel, Brazilian distributors have finally reported an increase in the sales of May 2016 in comparison to May 2015. The National Institute of the Steel Distributors (INDA), however, claims that there is no substantial improvement on Brazilian steel market to be reported yet.
According to INDA´s President, Mr. Carlos Loureiro, although sales in May have increased 2,2%, there are no perspectives of improvement regarding the domestic demand of steel, since the main sectors that consume steel, the car industry, electronic industry and civil construction, are presenting a slowdown at the moment.
Mr. Loureiro assigns the good sales results to the difficulties faced by buyers to import, due to the lack of credit and to the devaluation of Real face to the US dollar. For that reason, steel consumers may choose to buy the domestic steel. Brazil’s devaluated currency and bureaucracy regarding imports create an artificial protection to the domestic industry that discourages the national industry in becoming more competitive.
The plunge in the domestic demand did not prevent the national industry from readjusting the distribution prices for three months in a row and repassing its costs to the final consumer. In addition to the devaluation of the Brazilian Real, the national industry also has additional protection provided by 10 antidumping cases against flat steel and steel tubes. In that way, the national production remains very protected when compared to foreign products, even though the Brazilian steel sector claims to be on a difficult economic position.