--Brazil steel output growing amid overcapacity concerns, IABr
says
--Brazil steel sector says new buy-national incentives
needed
--Global steel consumption growth seen slowing in 2013
(Updates with World Cup, Olympics to bring relatively low extra
steel demand in 7th paragraph, investments in 9th paragraph, world
steel consumption growth slowing in final paragraph.)
By Diana Kinch
SAO PAULO--Brazil's crude steel output is set to grow 2.2% in
2012 to 36 million metric tons, but the sector will continue to
experience a high level of idle capacity, which is hurting cost
structures, executives of the Brazilian Steel Institute, or IABr,
said Tuesday.
This year's expected output is lower than original estimates
because of a blast-furnace reline at ArcelorMittal's (MT, MT.FR,
MT.AE) Tubarao steelworks in southeast Brazil, which is reducing
output, the incoming president of IABr, Albano Chagas Vieira, said
at a press conference in Sao Paulo.
Steel consumption in Brazil should reach 26.4 million tons in
2012, up 5.4% from 2011, the IABr executives said.
Exports this year should rise O.7% from last year to 10.9
million tons, while imports should fall 3.8% to 3.6 million tons,
IABr said.
The steel sector is operating with 40% idle capacity, partly due
to high import penetration in the Brazilian steel market, which
recently topped 20% and is leading to the risk of
deindustrialization, Mr. Vieira said.
"We need to make the domestic market grow, including by
eliminating distortions which may favor imports and by incentives
such as 'buy-national' campaigns," Mr. Vieira said.
Brazil's hosting of events including the 2014 World Cup and 2016
Olympic Games will boost steel demand by a relatively modest
700,000 tons a year, according to Mr. Vieira.
IABr Executive President Marco Polo de Mello Lopes noted that
Brazil's steel sector is also encumbered by taxes that may be
higher than in other major steel producing and exporting
countries.
Even despite difficult market conditions, steelmakers in Brazil
continue to complete investment programs that are already underway,
the IABr executives said. Investments of $16 billion are foreseen
in new capacity and improvements of existing installations by
2016.
World-wide, there are "a worrying" 526 million tons of idle
steelmaking capacity, equivalent to around 25% of global capacity,
outgoing IABr President Andre Gerdau Johannpeter said.
This year, global steel consumption is expected to rise 3.6% to
1.422 billion tons, compared with an installed capacity of 2
billion tons Mr. Gerdau said.
Global consumption is unlikely to grow more than 3.3% in 2013,
"due to the seriousness of the crisis in Europe," Mr. Gerdau said.
"It's a worrying outlook," he said.