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Brazilian steel industry: modest, but conscious and steady growth in 2023

Brazilian steelmakers are expecting a modest expansion of production, sales, and apparent consumption in the country for 2023. Brazilโ€™s crude steel production in 2023 is projected to rise 2% on year to 35.3 million mt, according to Aรงo Brasil Institute, the representative entity of the Brazilian steel producing companies. 

The forecast for 2023

Domestic sales could rise by 1.9% to 20.6 million tonnes. The projected apparent consumption is 23.7 million mt, up 1.5%, according to the group’s forecasts.
The steel industry, as pointed out by the chairman of the board of Aรงo Brasil and the president of ArcelorMittal Brasil, during a press conference on November 30, will benefit from the growth of some contiguous sectors over the course of 2023. The civil construction GDP should increase between 1.5% and 2% this year, while capital goods should grow 0.5-1%. And, in particular, the automotive industry is expected to produce between 5% and 6% more vehicles than 2022.

But itโ€™s not all positive news. High inflation and tax rates, rising energy prices, and fears of an ongoing recession will dent steel consumption globally in 2023. After this year, the apparent steel consumption in Brazil should grow by an average of 3.5%-4% a year. 
The recovery of the steel industry will not be dizzying, but will be favored by the decrease in raw materials costs, like coking coal, coke, iron ore, pig iron, and scrap.

The strengths of Brazilian steel in 2022

Mello Lopes, Aรงo Brasilโ€™s executive president, claimed that 2022 was the fourth best year of the last decade for the steel industry, surpassed only by 2021, 2014, and 2013.
2022 was a positive year for exports of finished steel products from Brazil, which could register a growth of 12.3%, supported by the foreign exchange and lower domestic sales in the second half of the year. Added to this favorable forecast is that relating to imports, which are expected to fall by 34% in 2022 and increase slightly (2.3%) in 2023. 

Investments and goals

For 2023, local steel producers are betting on the sale of value-added products, such as special and coated steels. In the meantime, the sectorโ€™s investment plan for the next four years (2023-2026), set at 40.6 billion Real ($7.80 billion), aims to modernize facilities in order to reduce production bottlenecks and improve the product mix.

Source: spglobal.com

Read also: A Harsh Winter for the Aluminium Industry
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