Business Monitor International


Brazil Metals Report

Published 03 October 2014

  • 61 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,295.00
Brazil Metals Report

BMI View: R efined metal production and consumption in Brazil will see accelerating growth in the years ahead on the back of expansion in Brazil's automotive, construction, and infrastructure sectors. However, the coming quarters will remain challenging owing to weak economic growth marked by subdued private consumption and fixed-asset investment.

Stronger Sector Performance In Latter Half Of Decade

We expect metals consumption and production to face headwinds in the coming quarters on account of modest economic growth ( see '  Slow Growth Here To Stay ,' September 9). We forecast real GDP growth of just 0.7% in 2014 and 1.5% in 2015 on the back of sluggish private consumption, subdued fixed asset investment, and a weak business environment. Moreover, electricity costs remain elevated, raising costs for the energy-intensive metals industry. Nevertheless, our multi-year outlook towards Brazilian economic growth is more constructive, as we forecast solid growth in the automotive, construction, and infrastructure sectors. We therefore expect metals demand, and hence production, to accelerate in the latter half of the decade.

Stronger Industry Prospects Beyond 2015
Brazil - Real GDP & Fixed Capital Formation (% chg y-o-y)

The majority of Brazilian metals production will be consumed within the country, providing an opportunity for companies to increase revenues and profits in the domestic market in the years ahead as economic growth improves. We expect domestic aluminium and copper demand to exceed production, in contrast to steel, which will see production levels exceed consumption.

While firms will be able to take advantage of stronger economic fundamentals on one hand, they will also face constraints from Brazil's complex tax and regulatory environment on the other. The latter will add to production costs and put pressure on margins. Lower import duties on certain metal products, after higher rates in previous years, will also weigh on domestic producers....

Table of Contents

BMI Industry View
7
Stronger Sector Performance In 2015 Onward
7
SWOT
9
Metals SWOT
9
Industry Forecast
11
Steel: Consumption And Production To Grow At Moderate Pace
11
Consumption To See Multi-Quarter Weakness
11
Production Gains In Mid-Decade
13
Table: Steel Production & Consumption (Brazil 2010-2018)
14
Table: Steel Industry Historical Data (Brazil 2005-2012)
14
Aluminium: Cheaper Electricity To Spur Production
15
Electricity Prices Remain Top Challenge
15
Consumption Growth To Remain Stronger
17
Table: Aluminium Production & Consumption (Brazil 2010-2018)
18
Copper: Consumption Growth To Outpace Production
19
Consumption Growth To Outpace Production
20
Table: Refined Copper Production, Consumption & Balance (Brazil 2010-2018)
21
Regulatory Development
22
Tax Regime
22
Corruption To Persist
23
Table: Brazil - Political Overview
23
Commodities Forecast
25
Table: BMI Steel Price Forecast
25
Short-Term Outlook
25
Core View
26
Surplus Set To Slim
26
Production: Reining In Growth
27
Consumption: Deceleration Ahead
29
No Respite From Chinese Exports Over Coming Months
31
Arbitrage Set To Grow Between East And West
31
Risks To Price Outlook
32
Table: Steel Data & Forecasts
33
Table: Global Steel Prices By Region & Product, USD/tonne (average)
33
Commodity Strategy
35
Iron Ore: Not Much Respite In Sight
35
Steel: Production Rationalisation Too Slow To Provide Price Upside
37
Aluminium: Further Price Rally Unlikely
38
Lead: Ripe For A H214 Boost
39
Copper: Consensus Moving Our Way
40
Nickel: Price Surge To Abate Further
41
Tin: In A Sweet Spot
42
Zinc: Bullish Short-Term Picture
43
Table: Select Commodities - Performance & BMI Forecasts
44
Competitive Landscape
46
Table: Financial Data For Key Metals Firms Listed In Brazil
46
Metal Producers To Continue Grappling With Energy Costs
46
Company Profile
48
Gerdau
48
Recent Financial Performance
49
Table: Gerdau - Key Financial Data
50
Cia Sider-rgica Nacional
51
Recent Financial Performance
53
Table: CSN - Key Financial Data
53
Vale
55
Company Overview
57
Company Strategy
58
Recent Financial Performance
59
Table: Vale - Key Financial Data
60
Company Details
60
Methodology
61
Cross Checks
61

The Brazil Metals Report has been researched at source, and features latest-available data for steel, aluminium and other major globally-traded commodities. Our analysis covers all primary indicators, including production, exports and price, with our forecasts underpinned by Business Monitor International (BMI)'s macroeconomists global economic outlook. The report analyses trends and prospects and critically evaluates latest industry news, trends and regulatory developments in Brazil.

BMI's Brazil Metals Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the metals industry in Brazil.

Key Benefits

  • Benchmark BMI's independent metals industry forecasts for Brazil to test other views - a key input for successful budgeting and strategic business planning in the Brazil metals market.
  • Target business opportunities and risks in Brazil through our reviews of latest industry trends, regulatory changes and major projects and investments.
  • Exploit the latest competitive intelligence and company profiles on your competitors and peers.

Coverage

BMI Industry View

Summary of BMI's key forecasts and industry analysis, covering metals production and prices, plus analysis of landmark company developments and key changes in the regulatory environment.

SWOT Analysis

SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis of the state's metals sector, business environment, politics and economics, which carefully evaluates the short- and medium-term issues facing the industry.

Global Metals Market Overview

Global demand, supply and price forecasts for steel and aluminium, as well as gold, copper and tin, drawing on both our industry expertise and our macroeconomic and financial market team's long-term global demand forecasts and shorter-term market views.

Industry Forecasts

Historic data series and forecasts to end-2018 for all key industry indicators (see list below) supported by explicit assumptions, plus analysis of key downside risks to the main forecast.

Production (`000 tonnes, US$bn), consumption (`000 tonnes, US$bn), exports (`000 tonnes, US$bn); prices (US$/tonne), and growth (%).

Macroeconomic Forecasts

BMI forecasts to end-2018 for headline country macroeconomic indicators, including real GDP growth (%), GDP per capita (US$), population (mn), industrial production index (% y-o-y average) and unemployment (% of labour force).

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc