Brazilian steel makers produced less in April as the country's manufacturing sector continued to struggle with a sluggish economy, according to data released the Brazil Steel Institute, or IABr.
Brazil produced 3.0 million metric tons of crude steel in April, down 1.2% from April 2011, the IABr said. Year to date, the country has produced 11.8 million tons. That's up 1.7% from the first four months of 2011, according to the institute.
Local steelmakers have reined in output as high raw materials costs undercut margins, while sluggish growth in Latin America's largest economy also makes it difficult to pass along increased costs to consumers in the form of higher prices. In addition, imports of cheaper imported steel have also found their way onto the local market.
Sales of steel products in the domestic market also slipped 2.1% year-on-year in April to 1.8 million tons, the IABr said.
The Brazilian real's strength against the U.S. dollar has also made locally produced steel products less competitive on international markets, undercutting exports. Exports of steel products are down 7% at 3.4 million tons year-to-date through April. Imports, however, are up 17% at 1.3 million tons in the same period this year.
Brazil is the world's 10th largest steel producer.
Source: Dow Jones