Brazilian and Global Steel Chain

Steel consumption in Brazil and in the world is directly connected to economic growth. This relation occurs because steel and its sub products (tubes and sheets, among others) are intensely present in items that we use daily and in the country’s infrastructure.

From cars to ships, from furniture to building, from refrigerators to hydroelectric plants, we use steel almost without perceiving it. In this manner the steel production chain is dynamic and fundamental to the country and generates value in its diverse stages, from mining to logistics.

Steel in everyday living: automobiles, agricultural machinery, civil construction structures, ships and even the stove we have at home.

Brazil ranked 9th place in global steel production in 2016 and has several challenges in order to improve its competitive capability.

Below is a summary of the present steel chain scenario in Brazil and in the world:

  • In 2016, global steel production was 1.6 billion tons;
  • The highlight was China, with 803.8 million tons, followed by Japan, with 105.2 million;
  • Labor cost and currency appreciation are important points for Brazil to improve its competitive position;
  • At present, there is excess production capacity in the world;
  • Under these conditions, the country is less competitive than India, China, Mexico and Russia;
  • The tax burden on capital goods investment is 46% in Brazil, with direct impact on competition with other countries;
  • Diversity of economic sectors that use steel as raw material gives the steel industry more dynamism.

Source: Word Steel, McKinsey.

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