After several months facing up to the COVID-19 pandemic, the Brazilian scrap market is continuing to function. As part of what has been recognized as an essential industry, all yards are fully operational in line with World Health Organization protocols.
Despite the COVID crisis, exports from February to June were 15% higher year on year. This excellent news for Brazil’s recycling companies was partly due to a lack of demand from domestic plants and the closure of the US and European markets.
With depressed demand, meanwhile, productivity within the Brazilian steel market remained low from February to May. Real estate growth in June brought increased demand for rebar, prompting Brazilian mills to increase their prices. Generation of scrap had already been low prior to the pandemic owing to Brazil’s economic slowdown, but the decline accelerated with the COVID outbreak and pushed up purchase prices and, consequently, domestic prices.
The market will remain uncertain over the next six months, but with exports continuing.
INESFA, the Brazilian Association of Iron and Steel Companies (BRA), Board Member of the BIR Latin America Committee