Standard & Poor's analyst Rafaela Vitoria said that demand for steel in Latin America is likely to increase 3-5% in 2013 on the back of GDP growth.
Ms Vitoria told the S&P Global Metals & Mining 2013 Outlook that "A gradual improvement" in GDP in the region will result in "slightly better" demand for the metal.”
She added that “We don't think this is enough for steel prices to go up but it should improve capacity utilization and it should help dilute costs for steelmakers in the region. Variable prices should also ease with lower iron ore and coal prices in 2013."
Ms Victoria said that lower energy costs will also benefit steelmakers in Brazil, as the government cuts the tax burden on electricity starting in January.
She added that but competition in the industry "will remain fierce" because of overcapacity in the region and globally.
Ms Vitoria said that imports are likely to be less of a threat to Latin American steelmakers because of more favorable exchange rates.
But low growth in the region may act as a "counterbalance," she added that with total capex also expected to fall, as the industry has "recently concluded an extensive investment cycle."
Source:
http://www.steelguru.com/international_news/Latin_America_steel_demand_to_increase_by_5_percent_in_2013_SandP/295013.html
