Rio, August 13, 2003 (Agência Brasil - ABr) - Brazil's total steel exports between January and June of this year amounted to 5.958 million tons, a 31.2% increase over the tonnage exported during the same period last year, a consequence of the accentuated fall in sales on the domestic market, the president of the Brazilian Steel Institute (IBS), José Armando de Figueiredo Campos, explained on Tuesday (12), in Rio.

According to Figueiredo Campos, the domestic demand for steel products has been falling continuously since May, and this led steel mills to direct their sales to the international market. Domestic sales of long steel, for example, declined 7.9% between January and June. His expectation, nevertheless, is that, beginning in October, some steel sectors will experience recovery on the domestic market.

In the assessment of the president of the IBS, two factors contributed to the increase in steel exports: the rise in domestic prices as a result of currency appreciation and the improvement in Brazil's export product mix.

Signs of weakness were not reflected in production, which amounted to 15.326 million tons in the first half of this year, 8.4% more than in the first half of 2002, including an increase of almost 14% in sheet steel production, according to the president of the IBS.

In the flat steel sector, production rose substantially (18.7%), confirming observations made in 2002 that the steel industry was increasing the supply of flat steel on the market. Sales of flat steel, however, grew only 5.8%, Figueiredo Campos revealed. Still, he classified this result as exceptional, considering the economic recession. This means that stockpiles in the productive chain may be large. As an example, he cited the 5.1% increase in direct sales of flat steel to the automotive sector, including auto parts, in the first semester of this year, in comparison with the same period in 2002. If the comparison were based on the second semester of last year, the increase would come to 14.3%, the president of the IBS observed.

For distributors, sales in the first six months of 2003 rose 10.5% in comparison with the same period in 2002. This confirms the existence of inventory stockpiles; that is, purchases were made in greater volume than what was resold. (DAS)