Automotive sector could be the main driver of steel demand recovery in Brazil

The automotive sector could be the main driver of any recovery in steel demand in Brazil if the construction sector does not pick up steam, said Diego Ocampo, Senior Director and Specialist for Hard Industries Latin America.

“We have a positive view on the automotive market and could be one of the drivers, if not the main one, for any recovery in demand for Brazilian steel,” Ocampo said at the S&P Global Platts Steel Markets conference in Latin America in Sao Paulo. Thursday.

The question is when the consumption of infrastructure and construction will resume in earnest, relying as much as on the political situation in the country, given the continuing uncertainty in Brazil, Ocampo said.

“There is no sign of infrastructure development,” Ocampo said. "However, the construction of houses and cars is improving slightly."

At the same time, according to Ocampo, in the short term, the investment outlook in South America is not very favorable.

“We do not view Argentina's prospects positively, as it is constantly suffering from the economic crisis, while Chile is a small market. Brazil is still waiting for a recovery to boost its demand, ”he said.

Ocampo said domestic Brazilian prices have tracked international prices more closely since early 2015, holding back imports.

“Domestic steel prices in Brazil have indeed correlated with international prices in the past few years. The difference between the two is largely consistent, ”he said.

But “trade tensions are keeping domestic prices and volumes high,” he added.