Brazilian end-use sectors concerned about lack of steel inventory

Brazilian end-use sectors concerned about lack of steel inventory

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Several Brazilian steel consuming sectors, including machinery and civil construction, are concerned of a potential lack of steel products, according to a media report from Valor.

Despite a quick relief in steel supply, which was limited until recently, trade groups say steel prices are somewhat high and there could be further hikes. Such hikes could hinder margins for these steel consuming sectors.

“This is a chaos. It’s never been so bad. … We’re in the worst moment of with a shortage of steel supply,” said José Velloso, president of the Brazilian Machinery Builders’ Association (ABIMAQ).

As for the civil construction segment, the concern centers on already closed contracts that did not factor in steel price hikes.

Such a situation creates a “huge” risk as companies might lack resources to complete civil construction projects due to the increased cost of products, including steel, said José Carlos Martins, president of the Brazilian Chamber of Civil Construction, CBIC.

In response to Valor, the Brazilian steel association, IABr, said the domestic steel industry is operating at 67.3 percent its capacity and can meet domestic demand for steel products.

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