Brazil Steel Industry

Brazil Steel Industry is one of the five countries (Brazil, China, Korea, India and Turkey) which accumulatively accounted for almost half of the total steel production around the globe in the financial year 2006.

Brazil Steel Industry is one of the five countries (Brazil, China, Korea, India and Turkey) which accumulatively accounted for almost half of the total steel production around the globe in the financial year 2006.

The history of Brazil Steel Industry dates back to the mid-twentieth century when these steel factories heavily resorted to government backing because at that time steel was regarded as the fundamental material in the path of modern economic growth. In those times, the Brazil Steel Industry were used to be set up in the areas rich with raw iron ores. Thats why, the state of Minas Gerais became the center for production of steel. From 1955 to the early 1990s, the Brazil Steel Industry used to be gided by the National Development Plan and was incepted by the government of Juscelino Kubitschek. During the 1960s, the major steel producing states were Volta Redonda, Minas Gerais and Sao Paolo. Brazil Steel Industry has been instrumental in the utilization of the latest technologies in the field of steel production. Most of these technologies had been imported from foreign countries among which the most significant technology was “Blast Oxygen Furnace”. Some of the other more important and advanced technologies that are being used in the Brazil Steel Industry include :-

• Increased importance has been given to the utilization of the continuous casting.
• More and more use of automated machineries in the process of steel production
• Adoption of the special techniques in the field of steel production.

The rapid development in the Brazil Steel Industry can be observed during the last one decade (namely, 1996 to 2006). Brazil has posted an absolute increase in the production of steel by 5.7 million metric tonnes which tantamount to a positive percentage increase of 22.4 % during the period 1996 to 2006. With the passage of time, the market share is aggressively and surely drifting away from the OECD countries to the trio countries including China, India and Brazil. It has been seen in the recent past that the steel companies are shifting their base from European countries to Brazil. These steel producing companies are finding the cost slab system more lucrative to build their set-up.

The major part (43 % of total steel production in Brazil as was recorded in the financial year 2005) of steel production of Brazil Steel Industry are meant for export. Most of these exports are meant for meeting the enhanced requirement of steel in China.

Some of the advantageous aspects of Brazil Steel Industry include the following points :-

• Abundance of raw materials (ore of iron, non renewable energies, coke or charcoal, etc.) required for steel production.
• The labor available in Brazil are very cheap in nature in comparison to the OECD countries.
• Availability of cutting edge technology in the production of steel.

But many researchers are also apprehensive about the future of Brazil Steel Industry because of the fact that China is restraining on the import of steel due to over-heating of the economy. Since, the Brazilian steel export is mainly targeted towards China, so it is seen as a great threat to the future prospect of Brazil Steel Industry. All these apprehensions have also cast its shadow on the stock prices of the Brazilian companies producing Steel. But analysts are also very much sure that the demand for steel would again surface in China after the economy cools off.