Sep 15, 2022
Brazilian steel institute reports major concerns from its associates

The institute quoted the vulnerability of the global production chains, due to the Covid 19 pandemic, as the main concern, along with an international boom of raw materials and energy prices and increased inflation rates worldwide, in a scenario additionally fostered by the invasion of Ukraine by Russia.

The rupture of the production chains has shown the interdependency among countries in the supply of items, leading to increased relevance for the reshoring of production to avoid the dependency from other countries, while strengthening the national and regional chains, IABr said.

In the specific case of the steel industry, there is an additional pressure from the excess steel capacity worldwide, currently estimated at 518 million mt per year, giving rise to predatory trading practices and protection measures by the countries, as consequence.

According to IABr, the ESG agenda is growing in importance and is already influencing decisions for investments and affecting the value of the companies.

IABr said with the commitment to the reduction of emissions related to the greenhouse effect, the steel producers need, in the short term, a guarantee for the supply of natural gas at competitive prices, coupled with increased offer of scrap in the domestic market and intensive research on new technologies, such as the use of hydrogen and the capture and stocking of carbon.

Source: Steel Orbis