Reuters reported that steel distribution companies in Brazil sold 5% more flat products in January 2012 than in the year earlier period, signaling what is likely to be a short lived recovery that loses momentum next month.
Sindisider, a group representing flat steel wholesalers, said in a report that distributors sold 356,600 tonnes of products in January 2012 or about 9.8% more than in December 2011. The rise helped push inventory of flat steel products 0.3% down to 997,900 tonnes in January 2012 from December 2011.
Inventory traded at 2.8 times sales of flat steel in January 2012, sharply down from 3.1 times in December 2011. The indicator, which is a gauge of unsold steel turnover, could end the year between 2.5 times and 2.8 times sales.
Mr Carlos Loureiro president of Sao Paulo based Sindisider said that the recovery in sales will not be repeated in February 2012, in an indication that the sector's worst crisis in years will linger for some more time.
He added that "According to our expectations, purchases by and sales from distributors will likely drop 10% in February 2012, reflecting a decline in demand for flat steel nationwide."
Distributors, who in the past two years piled up foreign made slabs and plates due to a rally in the currency, now worry that imported steel could intensify the pattern of deindustrialization afflicting Latin America's biggest economy.
Mr Loureiro told Reuters in an interview last month that steel distribution companies in Brazil might see sales of flat products growing this year at half the pace of 2011. Sales will remain especially weak through March because some infrastructure, logistics and oil investment plans are being executed at a slower pace than expected.
Sindisider said that imports surged 40.8% in January 2012 from a year earlier, totaling 183,600 tonnes. The surge in imports might indicate that local mills' attempts to up prices for some of their products to stem recent cost increases likely failed. Imports fell 11.6% from December 2011.
Distributors represented by Sindisider and INDA, the sector's association, are responsible for 42% of Brazil's local flat steel sales and 36% of apparent steel consumption in the country.
Reuters reported that steel distribution companies in Brazil sold 5% more flat products in January 2012 than in the year earlier period, signaling what is likely to be a short lived recovery that loses momentum next month.
Sindisider, a group representing flat steel wholesalers, said in a report that distributors sold 356,600 tonnes of products in January 2012 or about 9.8% more than in December 2011. The rise helped push inventory of flat steel products 0.3% down to 997,900 tonnes in January 2012 from December 2011.
Inventory traded at 2.8 times sales of flat steel in January 2012, sharply down from 3.1 times in December 2011. The indicator, which is a gauge of unsold steel turnover, could end the year between 2.5 times and 2.8 times sales.
Mr Carlos Loureiro president of Sao Paulo based Sindisider said that the recovery in sales will not be repeated in February 2012, in an indication that the sector's worst crisis in years will linger for some more time.
He added that "According to our expectations, purchases by and sales from distributors will likely drop 10% in February 2012, reflecting a decline in demand for flat steel nationwide."
Distributors, who in the past two years piled up foreign made slabs and plates due to a rally in the currency, now worry that imported steel could intensify the pattern of deindustrialization afflicting Latin America's biggest economy.
Mr Loureiro told Reuters in an interview last month that steel distribution companies in Brazil might see sales of flat products growing this year at half the pace of 2011. Sales will remain especially weak through March because some infrastructure, logistics and oil investment plans are being executed at a slower pace than expected.
Sindisider said that imports surged 40.8% in January 2012 from a year earlier, totaling 183,600 tonnes. The surge in imports might indicate that local mills' attempts to up prices for some of their products to stem recent cost increases likely failed. Imports fell 11.6% from December 2011.
Distributors represented by Sindisider and INDA, the sector's association, are responsible for 42% of Brazil's local flat steel sales and 36% of apparent steel consumption in the country.
Sourced from reuters.com
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