Brazilian integrated steelmaker Usiminas expects a 6% drop in 2008 sales to 7.5Mt, company investor relations official Gilson Bentes said during a presentation at the Expomoney conference in Rio de Janeiro on Thursday (Nov 27).
"We usually expect sales levels of approximately 8Mt/y," Bentes said. "But we had a natural output reduction due to a maintenance stoppage in our Cosipa Cubatão mill located in São Paulo state. But let's wait and see how we close the fourth quarter."
Bentes said the company made renovations in one of Cosipa's high blast furnaces and at one of the plant's continuous casting lines.
The IR official said reductions due to market weaknesses and tightening of credit for automobile buyers could also negatively affect sales in Q4.
In terms of steel demand, Bentes said growth in Brazil will be close to 7% in 2008 as opposed to early year projections of 11%.
"Demand has grown significantly in these last few years and mills were making higher projections due to market necessities," he said.
But Bente said he still believes that in the long run, there could be insufficient steel to supply local demand, adding that is the main reason Usiminas is maintaining its US$14.1bn investment plan through 2012.
"We have long-term projections saying there is going to be an absence of steel to supply Brazilian demand," he said. "So, there is still a need for Brazilian steelmakers to maintain their investments."
Usiminas is the top steel distributor in Brazil with a 15% market share, of which one-third goes to the automobile market and 20% heads to the construction sector.
Bentes said he believes car sales in Brazil will amount to some 3.4mn vehicles in 2008 and expects 2009 to be at the same level despite tightening of credit.
"Data shows that Brazilian vehicle production has been growing significantly in recent years," he said.
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