The metallurgical sector reviews and projections should languish new sales fall

Sao Paulo-the steel industry should get a new fall sales by 2017, faced with the stagnation of the economy. The Brazil Steel Institute (IABr) revised its projections and the marketing of the input must retreat 1.3% this year.
The entity was released in April a projection of sales growth of 1.3% for 2017, however, the poor performance of the brazilian industry has compromised the results of steel mills in the country.
"For now, there is no prospect of resumption of demand in Brazil", the Chief Executive of the IABr, Marco Polo de Mello Lopes, at a news conference. For this year, forecasting the entity is of a volume of domestic sales of 16,300,000 tonnes.
Already casting to production is maintained in 32,400,000 tons, an increase of 3.8% from 2016. However, the forecast covers basically the additional volume that the Companhia Siderúrgica do Pecém (CSP) will bring to the market, since the company began operating this year.
As the IABr, the only plaintiff steel sector has shown positive performance is automotive. On the other hand, construction, capital goods and appliances-which together with the 80% represent automotive demand of steel mills in the country-are still reporting falls.
"The way we have in the short term to keep the steel industry is to increase exports," said the Vice-President of the Board of Directors of the IABr, Sérgio Leite.
For 2017, the entity designs for exports growth of 9.1% (in volume), for 14,600,000 metric tons. In values, the prediction of the IABr is an increase in the shipments of 32.6%.
Lee points out, however, that the biggest steel consumer market Brazil, the United States, is implementing protectionist measures against the imported product.
"Our exports represent only 3% of apparent u.s. consumption, however, for us, the American market is of the utmost importance," says the President of the Board of Directors of the IABr, Alexander field Lyra.
According to the leader, approximately 36% of the exports of Brazil steel are intended for the United States. "The President Donald Trump has said that imports take jobs in the country, but our exports are primarily of semi-finished products, which will benefit in American soil. It doesn''t get a job ", Lyra. He cites as examples of products exported from Brazil plates and billets, which are rolled or receive treatment at u.s. plants.
The leaders of the IABr returned to score the need of improving the special scheme of reintegration of Tax Values for exporting companies (Returned), which returns the full or partial tax residue in exported goods. Currently, the rate is at 2%, but the law allows return of up to 5% of revenue from exports. "The Returned is essential for the survival of the steel industry in the short term," complements Lyra.
The IABr also highlighted the global steel overcapacity in almost 800 million tonnes, pressing even more the situation of steel mills. Lee explains that the average increase in the price of the basket of steel inputs, composed of iron ore and coal, was about 70% in the first half.
"Already the average growth of steel prices peaked at approximately 39%," reports.
Additionally, the IABr revised projection of apparent consumption for 2017 a 2.9% growth, made in April, to an increase of only 1.1%, for tons in Brazil 18,400,000.
Balance sheet
In the first half, crude steel production totaled 16,700,000 tons, up 12.4% over same period in 2016. However, if the volume of the CSP is not accounted for, the growth was only 5.4%. Have domestic sales totaled 8 million tons, a fall of 2% on the same basis of comparison.
Already exports grew 9.2% in volume in the first half, to 7,300,000 tons. But if shipments of the CSP are not accounted for, the IABr found a retraction of 9.7%.
From January to June, apparent steel consumption totaled 9,200,000 tons, slight high of 2.8% compared to the same range of 2016. "Companies have made a monumental effort to keep their production units. But if Brazil does not fix some asymmetries, the situation of the steel industry must make it worse, "says Lee.