RIO DE JANEIRO (Dow Jones) -- Brazilian flat steel inventories
fell to 1.157 million metric tons in January, down 3.8% from
December, as imports into Brazil declined, said Carlos Loureiro,
president of Brazilian Steel Distributors' Institute, or Inda.
January stockpiles were the equivalent of 3.4 months of usage,
down from 4.3 months' in December, because domestic sales of steel
by distributors from stock rose 21% during January to 340,000 tons,
Loureiro said. This was the distributors' highest sales level since
the 381,000 tons of March 2010, Loureiro said.
"The higher sales are the fruit of an upturn for local steel
producers who had lost market share to imports," Loureiro said.
"Brazil's producers are recovering market share."
According to Brazilian steel institute IABr, imports of both
flat and long steel products more than doubled last year to 5.9
million tons, worth $5.5 billion, attracted by the strong real,
higher prices on the domestic market and growing demand. Brazilian
mills were forced to cut product prices during the second half in
an effort to compete.
Imports then fell due to the lower prices that started to be
practiced on the domestic market, which are now lower than
international steel market prices, according to Loureiro.
Flat steel imports into Brazil in January slumped to 130,000
metric tons, down 42% on the 225,000 tons of January 2010, Loureiro
said.
"It's all due to price. We can expect another 3-4 months of low
imports," said Loureiro. More imports could however again start to
be attracted to Brazil if steel prices rise significantly in the
domestic market, according to the Inda president.
Brazil's steel inventories are set to reach usual levels
equivalent to 2.5 months' usage in April or May, Loureiro said.
- By Diana Kinch, Dow Jones Newswires, Tel: +55 21 2586 6086,
diana.kinch@dowjones.com