Steel represents a great volume of Brazilian exports. This article will cover the main aspects of the Brazilian steel industry, which is ranked as one of the 10 largest in the world.
The mixture of iron with carbon is one of the most used combinations in the modern factories. Present in vehicles, machines, objects and cables, steel is highly demanded by companies, as well as highly produced. The global production of this alloy reached the unprecedented total of 1.6 billion tons in 2013, and Brazil had an important influence on this new record.
The country has been producing steel since the 1920s and 1930s, when companies were established in the states of Minas Gerais and Rio de Janeiro.
One of the biggest incentives came in the end of the 1940s, when former president Getúlio Vargas created Companhia Siderúrgica Nacional (CSN), State company with the goal to encourage the national production of steel in order to reduce imports.
Several companies were installed, most of them with State participation. This happened until the 1990s, when a privatization process was initialized. Today, Brazil has 29 steel mills, administered by 11 company groups and is considered the largest producer of this alloy in Latin America.
The main representative entity of this sector is Instituto Aço Brasil, formerly known as Instituto Brasileiro de Siderurgia.
Company Groups in Brazil
The holdings and companies that currently take part in the Brazilian steel industry and are associated to the Instituto Aço Brasil, are:
- ArcelorMittal Brasil
- Thyssenkrupp CSA
- VSB Tubos
- V&M do Brasil
- Villares Metals
According to Worldsteel, the global association that represents this sector, Brazil has finished the year of 2013 as the ninth largest producer of steel in the world. The country was responsible for 34.2 million tons of steel.
Although impressive, this number was bigger in 2012. A decrease of 1% in the Brazilian production was registered by Worldsteel.
Instituto Aço Brasil, states that the Brazilian steel industry generates over BRL 45 billion for the country. The sector by itself is responsible for more than 110,000 jobs in Brazil.
Brazil was once a great importer of steel, but modernization processes and the entry of foreign companies allowed the country to increase its productive capacities. The exportation of the alloy is now one of the largest in the world, but recent results have not been so favorable.
The sector claims for incentives to encourage the internal market, since there is an excessive production of steel throughout the world, resulting in lower demand.
2012 was a rough year for the sector, with exports decreasing 9.6% in volume and 16.7% in value, compared to 2011. The year of 2013 was also far from presenting the desired results, since another decrease, of around 13%, is expected to be confirmed.
The first quarter of 2014 presented more negative results: the 2 million tons of steel exported meant a fall of 19.1% of the volume exported, in comparison with the same period from 2013, and the USD 1.5 billion represented a decrease of 6.9% in value.
Nevertheless, according to Instituto Aço Brasil, the country is currently ranked as the fifth largest net exporter of steel in the world, selling the alloy to more than 100 nations.
Even with the recent bad results, Brazil’s balance of trade is still positive when it comes to the steel industry. In total numbers, the importation of this alloy has also decreased, but many entities complain that steel from other countries were used in important works, such as the World Cup stadiums.
When it comes to buying steel from foreign nations, a decrease of 14.4% in 2013 is expected to be confirmed . In the first quarter of 2014, a total of 877,000 tons of this alloy were imported, representing a growth of 3.9% when compared to the same period in the year before.