Steel in Brazil Global vs Local Outlook Analysis¶
Global vs Local outlook¶
This report provides a comparative analysis of the global and local (Brazilian) outlooks for the steel value chain based on recent trends in 2024 and projections for 2025.
Globally, the steel market is navigating a period of modest recovery following a challenging 2024. Overall global steel demand is expected to have experienced a slight contraction of 0.9% in 2024, with a projected rebound of 1.2% in 2025. Developed economies, including the EU, faced more significant declines in demand in 2024 but anticipate a recovery in 2025. The EU, for instance, is forecast to see a slow recovery in 2024 before a more substantial increase in demand in 2025. In contrast, developing economies, excluding China, are expected to demonstrate more robust growth in steel demand in both 2024 and 2025, largely propelled by strong performance in India and a general rebound in other major emerging markets. China, a dominant force in the global steel landscape, is projected to see a decline in its steel demand in both 2024 and potentially in 2025, primarily due to ongoing weakness in its real estate sector. Global steel production is anticipated to have slowed in 2024 and is expected to remain subdued in 2025. A persistent global challenge is the issue of excess steelmaking capacity, which continues to outweigh global demand and is projected to increase further in the coming years. This overcapacity, coupled with weakened demand in certain regions, has contributed to falling global steel prices, a trend expected to continue into 2025. High energy costs remain a significant competitive disadvantage for steel producers in some regions, notably Europe. The long-term outlook is influenced by the global push towards decarbonization, which is expected to drive future steel demand, particularly in green infrastructure projects. China remains a major player in global seaborne steel trade, accounting for a substantial portion of flows.
In the local Brazilian context, the steel market demonstrated resilience in 2024 with a 5.3% increase in crude steel production and an 8.3% rise in domestic sales and apparent consumption. The outlook for 2025 is a slight decrease in production and domestic sales, but a continued increase in apparent consumption (1.5%). A defining characteristic of the Brazilian market in 2024 and early 2025 has been the significant surge in steel imports, reaching a record high of 5.9 million tons in 2024, with China being the primary source. This influx of imports has become a major challenge for domestic producers, accounting for a considerable portion of local demand and creating price pressure. The Brazilian government implemented a quota and tariff system in June 2024 to address this import challenge, but its effectiveness has been debated, and the system's expiration in May 2025 introduces uncertainty. Despite the import pressures, domestic demand showed signs of recovery in early 2025, driven by key sectors like construction and automotive. The Brazilian steel market size was estimated at $71.5 billion in 2023 and is expected to grow. Government initiatives in infrastructure development, urbanization, and the broader economic recovery are seen as drivers for domestic consumption. Similar to the global trend, there is a growing emphasis on sustainable practices and decarbonization within the Brazilian steel industry, with opportunities identified in production technique innovation and enhancing export strategies.
Comparing the global and local outlooks reveals several similarities and key differences. Both markets are significantly influenced by the performance of major steel-consuming sectors like construction and automotive. The global issue of overcapacity and excess supply directly impacts the Brazilian market through increased imports. The global movement towards decarbonization and sustainability is mirrored by a growing focus on these aspects within the Brazilian industry. China's prominent role in the global steel trade and its position as the main source of increased imports into Brazil highlight its significant influence on both scales. However, a notable difference lies in the recent performance trajectory; Brazil experienced positive growth in production and consumption in 2024, while global demand saw a slight contraction. The scale and impact of surging imports are particularly pronounced challenges in the Brazilian context, leading to specific government trade defense measures that are a distinct local factor.
Trends detailing¶
| Trend | Global Outlook (2024-2025) | Local Outlook - Brazil (2024-2025) |
|---|---|---|
| Steel Demand/Consumption | Slight drop in 2024 (-0.9%), rebound in 2025 (+1.2%). Developed economies decline in 2024, recovery in 2025. Developing economies ex-China grow. China demand decline. | Apparent Consumption: +8.3% in 2024, +1.5% projected in 2025. Domestic Sales: +8.3% in 2024, -0.8% projected in 2025. Domestic demand recovering in early 2025. |
| Steel Production | Slowdown in 2024, subdued in 2025. | Crude Steel Production: +5.3% in 2024, -0.6% projected in 2025. |
| Imports | China dominant in seaborne trade. | Surged +18.2% in 2024 (record high), significant growth in early 2025. China main source. Major challenge for domestic industry. |
| Exports | Influenced by global demand and trade policies. | Decreased -18.1% in 2024. |
| Prices | Falling prices expected to continue into 2025 due to oversupply and weak demand. | Pressure on domestic prices due to imports. Price increases implemented for flat steel early 2025, contract renegotiations with automotive with adjustments. |
| Overcapacity | Remains high and projected to increase. | Contributes to pressure from imports. |
| Key Consuming Sectors | Construction and automotive influential globally. | Construction and automotive driving domestic demand recovery. |
| Sustainability/Decarbonization | Emerging as important global trend, driving future demand (green infrastructure). Companies adopting greener practices. | Growing emphasis on sustainable practices and decarbonization. Opportunities in production technique innovation. |
| Government Influence | Trade policies (e.g., tariffs), environmental regulations. | Implementation of quota and tariff system to curb imports, effectiveness debated, expiration in May 2025 creates uncertainty. Government infrastructure initiatives driving consumption. |
| Operational Costs | High energy costs a disadvantage in some regions (e.g., Europe). | High logistical and operational costs (energy, taxes) are challenges. [Appendix - Value Chain Analysis, Bottlenecks and Challenges] |
References¶
- Eurofer - Economic and steel market outlook 2024-2025, fourth quarter.
- Atradius - Metals and Steel Industry Trends May 2024.
- worldsteel - worldsteel Short Range Outlook October 2024.
- The Rio Times - Brazil's Steel Industry Faces Growth at Home but Challenges Abroad.
- Argus Media - Brazil steel imports hit record high in 2024.
- OECD - Latest developments in steelmaking capacity and outlook until 2026.
- DatamarNews - Year starts well for Brazil's steel; imports and U.S. concern.
- MBS - Steel sector: In “steel” we trust.
- GMK Center - Analysis of the reasons for the fall of global steel prices in March 2025.
- GMK Center - Steel prices may fall by another 4% in 2025.
- Signal Ocean Platform - TSG The U.S. Steel Industry: Market Outlook, Theory, and Global Trade Implications.
- Moody's Local - Usinas Siderúrgicas de Minas Gerais S.A. – Usiminas.
- Instituto Aço Brasil - Indústria do aço projeta investir R$ 100 bi até 2028 - a despeito do consumo estagnado.
- Deloitte Brasil - Descarbonizando a cadeia de valor do aço.
- Revista Mineração - Produção da ArcelorMittal cresce 16,5% em 2023.