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UPDATE 1-Brazil steel sales seen returning to pre-crisis levels-IABr
November 27, 2012 / 6:35 PM / in 5 years

UPDATE 1-Brazil steel sales seen returning to pre-crisis levels-IABr

* IABr sees steel sector on the path to recovery
    * Output to decline 1.1 pct this year, group says
    * Apparent consumption seen rising 4.3 pct in 2013

    RIO DE JANEIRO, Nov 27 (Reuters) - Steelmakers in Brazil
will likely witness a recovery in sales and a reduction in
excess capacity next year as recent government measures to
revive growth are bearing fruit, an industry group said on
    Domestic sales of rolled and other steel products may rise
to 23.4 million tonnes next year, up 7.8 percent from an
estimated 21.7 million tonnes in 2012, Instituto Aço Brasil said
in a statement on Tuesday. Sales will probably rise 1.3 percent
this year, said the group, known as IABr.
    Apparent consumption, or the sum of domestic sales and
imports of steel, is expected at 26.4 million tonnes next year
even as imports are seen down by nearly 1 million tonnes, IABr
added. The tone for next year is "of an improvement," following
a couple of weak years for an industry that employs about
140,000 in the country.
    Brazil's steel industry is facing one of its worst crises in
years. Mills in Brazil are grappling with global steel
overcapacity and weak prices, rising costs for some raw
materials such as coal, and a domestic output glut.
    "It is believed that the measures that are being adopted by
the government will propel growth in the coming year and will be
reflected in better results for the sector," the statement said.
    Sales of rolled steel in the country are seen returning next
year to levels not seen since 2008, IABr said. Idle capacity in
raw steel production should be down by seven percentage points
next year, the group estimates.
    This year, President Dilma Rousseff has trimmed taxes,
extended financial aid to ailing industries and imposed trade
barriers on imported steel and other products to revive a
flagging manufacturing industry. Despite all that, earnings at
Brazil's largest mills have plummeted and inventory and idle
factory capacity have both remained high.
    IABr President Marco Polo de Mello Lopes had said in
September that industry estimates for this year might have to be
lowered, because of the crisis.
    Output likely fell this year by 1.1 percent, exports by 11
percent while apparent consumption probably rose 1.1 percent,
the group said.

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