Domestic consumption of aluminium products in Brazil will grow 4.1% year-on-year in 2013, beating previous estimates of a 3.7% growth, according to Brazil’s aluminium association Abal.
A higher GDP growth forecast would have given further boost to our estimates, Luis Carlos Loureiro Filho, Abal’s economy and statistics commission co-ordinator, told Metal Bulletin.
Abal’s estimates point at a domestic consumption of 1.48 million tonnes of transformed aluminium products in 2013, from 1.42 million tonnes in 2012.
Brazil’s central bank recently lowered the country’s GDP growth forecast for 2013 to 2.5%, from 2.7% expected earlier.
In the January-June period, Brazil’s economy grew 2.6% year-on-year, according to official news agency Agência Brasil.
Domestic consumption of sheets, the best-selling aluminium product in Brazil, is expected to increase 7.6%, totalling 574,000 tonnes by the end of the year.
Extruded products are set to end the year at 376,000 tonnes, up more than 7% year-on-year and cast items’ consumption will grow 3.2%, totalling 214,000 tonnes.
Wires and cable products, by contrast, are expected to end the year with a 10.5% fall in consumption.
“We were expecting a series of energy transportation construction works which are late or embargoed. We believe that all projects will eventually be developed but that is long term,” Loureiro added.
Domestic consumption of wires and cables was 147,700 tonnes in 2012.
“Over the coming two years, Brazil’s government is keen to address infrastructural shortcomings through a huge programme of investment in energy and transportation networks. If successful, it may raise demand for base metals significantly,” Investment bank Natixis said in a report, adding, “We are forecasting growth in Brazilian demand for aluminium of around 5% per annum for 2014-15.”
“The risks to this scenario are almost certainly on the downside, however, given Brazil’s poor record of delivering such large government projects on time,” Natixis added.
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