Gerdau Says Brazil Steel Capacity Double Local Demand

Dec. 9 (Bloomberg) -- Brazil’s steel output capacity is twice as much as domestic demand, Gerdau SA Chairman Jorge Gerdau Johannpeter said.

The country must make an effort to increase steel exports in view of low domestic demand, Gerdau Johannpeter told reporters in Brasilia today.

Crude steel production capacity in Brazil will rise 3.6 percent next year to 43.5 million metric tons, about double demand levels which are still recovering from the crisis, Flavio Azevedo, president of Brazil’s Steel Institute Aco Brasil, told reporters Dec. 2. In the medium-term, new mill projects including those announced by Vale SA will boost capacity further, particularly for the export market, he said.

Steel demand will climb 22 percent to 22.9 million tons from 18.8 million this year as orders grow from industrial segments including carmaking, according to the institute.

“There’s going to be steel to spare,” Azevedo said. “Brazil’s going to continue with high export levels.”

Steel exports from Brazil increased 3.3 percent this year and will grow an additional 16 percent to 11 million tons in 2010, according to the institute’s forecast.

Rio de Janeiro-based Vale is developing four steel projects in Brazil with a combined crude steel capacity of 15.5 million tons a year.

Diana Kinch