Itaú BBA - Steel: More challenges ahead

Sector Insights

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Steel: More challenges ahead

January 22, 2015

In 2015, production costs will remain pressured by higher energy prices.

• The Brazilian steel industry has been under intense negative pressure, from both the external sector, with excess supply in the international market, and the internal sector, with weak growth in the overall economy and the competitive pressure from imported products.

• The difficult moment experienced by the sector is reflected on steel production and absorption figures, as well as on the confidence indicator for the industry’s managers. Hence, we anticipate deceleration in capital expenditures in the industry in the next years.

• In 2015, in addition to the abovementioned challenges, production costs will remain pressured by higher energy prices. We expect a deceleration in the main industries which buy steel, plus the risk of a slow-down in the infrastructure projects by the government and state-owned enterprises.


 

Please open the attached pdf to read the full report.



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