2012-05-20 13:57:20 - Fast Market Research recommends "Brazil Metals Report Q2 2012" from Business Monitor International, now available
The threat of deindustrialisation hangs over the Brazilian steel and aluminium industries, which are facing increasing pressure from competition with cheaper imports and a lag between demand growth and capacity expansion, according to BMI's latest Brazil Metals Report.
Crude steel output saw solid year-on-year (y-o-y) growth of over 7% in 2011, even in the face of rising costs and the strength of the real, although rolled production contracted by 1.1% as a range of industrial sectors, such as carmaking, saw activity slow. The industry is set to see growth in downstream output in 2012 and beyond. Supported by capacity expansion, crude steel output should reach 36.9mn tonnes (mnt) in 2012 (up 4.5% over 2011) and hot-rolled output will total around 25.6mnt
(up 2.0% over 2011) by the end of the forecast period.
Domestic flat product sales growth is set to slow to 6% in 2012 from just under 12% in 2011 when 4.29mnt were sold. Buyers are also likely to reduce their stocks by about 10% this year to 900,000 tonnes. Slow sales, stock draw-downs and import growth will impact on steel output, prompting concerns of deindustrialisation. Brazilian longs production will be bolstered by growth in the domestic construction sector, which is being assisted by rising property values and preparations to host the 2014 FIFA World Cup and the 2016 Olympic Games in Rio de Janeiro. More troubling for Brazil is the sign that automotive output, which helped fuel most of the growth in flat products, is in decline.
Full Report Details at
In 2011 Brazilian primary aluminium output declined 6.2% year-on-year (y-o-y) to 1.44mnt, 10,000 tonnes less than BMI had forecast. Novelis' 47.4% decline in output is the result of the closure of its Aratu smelter, while its Ouro Preto smelter saw a 3.1% y-o-y decline in production volumes. The Companhia Brasileira de Aluminio (CBA) smelter also reported a 13.3% decline in output, which helped outweigh the modest increase in output reported by smelters owned by Albras, Alcoa and BHP Billiton. In 2011, Albras was Brazil's largest aluminium producer with 31.8% of total output, followed by CBA (28.4%), Alcoa (24.3%), BHP Billiton (12.2%) and Novelis (3.3%). The aluminium sector is fed by domestic alumina refineries with combined capacity of 10.55mnt. Recent smelter closures are related to the rising cost of energy and an influx of imports from China. While Brazil has large bauxite resources, it is becoming less economical to refine and smelt mining output. There are no plans to expand smelting capacity, despite growing domestic demand, which is set to grow to 2.5mnt by 2020.
Refined tin production has suffered from reduced mining output. However, BMI estimates that in 2011 refined tin output staged a recovery from the 36% drop in 2010, with output up 29% to around 9,000 tonnes. Nevertheless, the industry is still performing well below potential. The planned quadrupling of tin output at Mineracao Taboca's Pitinga mine to 10,000 tonnes by 2015 should boost resource availability, leading to refinery output of over 13,000 tonnes in 2016. This should move Brazil towards long-term selfsufficiency.
Report Table of Contents:
- Brazil Political SWOT
- Brazil Economic SWOT
- Brazil Business Environment SWOT
- Steel Market
- Table: BMI's Steel Forecasts
- Table: Steel Products And Inputs - Price Data
- Table: Brazil's Steel Industry Forecasts, 2009-2016 ('000 tonnes, unless stated otherwise)
- Table: Brazilian Primary Aluminium Production By Producer, 2009-2010 ('000 tonnes)
- Table: Brazilian Consumption Of Aluminium Processed Products, 2010-2011 ('000 tonnes, unless otherwise stated)
- Table: Brazil's Primary Aluminium Industry, 2008-2016 ('000 tonnes, unless otherwise stated)
- Table: Brazil's Refined Tin Industry, 2008-2016 ('000 tonnes)
- Macroeconomic Forecast
- Table: Brazil - GDP Contribution To Growth, 2008-2016
- Table: Brazilian Aluminium Smelters
- Regulatory Environment
- Companhia Siderurgica Nacional (CSN)
Global Assumptions, Q212
- Table: Global Assumptions, 2010-2016
- Table: Global And Regional Real GDP Growth, 2010-2013 (% change y-o-y)
- Table: Developed Market Exchange Rates, 2011-2013
- Table: Emerging Market Exchange Rates, 2010-2013
- Developed States
- Table: Developed States - Real GDP Growth, 2010-2013
- Emerging Markets
- Table: Emerging Markets - Real GDP Growth. 2010-2013
- Table: BMI And Bloomberg Consensus Real GDP Growth Forecasts, 2011 And 2012 (%)
Country Snapshot: Brazil Demographic Data
- Section 1: Population
- Table: Demographic Indicators, 2005-2030
- Table: Rural/Urban Breakdown, 2005-2030
- Section 2: Education And Healthcare
- Table: Education, 2000-2003
- Table: Vital Statistics, 2005-2030
- Section 3: Labour Market And Spending Power
- Table: Employment Indicators, 1999-2004
- Table: Consumer Expenditure, 2000-2012 (US$)
- Table: Average Annual Wages, 1996-2002
- How We Generate Our Industry Forecasts
- Cross Checks
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