Giuliana Napolitano
São Paulo – The combination of internal market retraction and the increase of international demand, pulled by the Chinese economy boom, has favoured Brazilian ironworks industry export. Data provided by the Iron and Steel Sector Association (IBS) shows that, in value, foreign trade of the product rose around 35% last year, to US$ 3.9 billion. In volume, the increase was a little lower, but still commemorated by Brazilian businessmen in the sector: the increase was around 11%, to 13 million metric tonnes.
If these results are considered positive by the industry, business with the Middle East stands out. The trade volume is still small – more so if compared to trade with Asia and North America, the largest importers -, but the growth was way above the world average. Last year, steel export from Brazil to the Middle East rose 309% in volume and reached 143,000 tonnes, according to the IBS. In terms of value, the expansion was 202%, to US$ 70 million.
The institution executive vice president, Marcopolo de Mello Lopes, attributed this growth to the "global tendency of Brazilian steel industry export." He pointed out, however, that "the sector policy is to diversify markets, especially due to safety." "We export to over 40 countries," he added.
Billion dollar projects and Iraq
Among the causes for this increase in steel sales to the Middle East are the billion dollar civil construction projects currently taking place in the region. In Dubai alone, constructions include Dubailand, the largest tourism, leisure, and entertainment complex in the Arab world, which promises to be the local Disneyland, and Palm Island artificial archipelago, which will include over 2,000 houses and 50 hotels, apart from shipping centres and cinemas.
With this, Middle Eastern steel consumption between 2000 and 2002 rose more than the world average: 11%, to around 20 million tonnes, according to information supplied by International Iron & Steel Industry (IISI). In the same period, global consumption rose 8%, to 819 million tonnes, and this rate was only reached due to the pressure generated by the Chinese market.
China has increased the consumption of ironworks products by 50%, and is today the largest iron consumer in the world: 211 million tons, one quarter of world production.
This is not counting Iraq. Analysts consulted by Arab paper Gulf News stated that civil construction in the country has not yet gained strength, but that this should take place in coming months. "We, as does the rest of the world, certainly expect to participate in this market. The potential opened with reconstruction is very great," stated Lopes, from the IBS.
In the Middle East, the main market for Brazilian iron is Saudi Arabia, which purchased 53,000 tonnes from the country last year, one third of total export to the region. In second place comes the United Arab Emirates, which imported 34,000 tonnes. Brazil also sells ironworks products to Arab countries in North Africa, like Morocco (50,000 tonnes), Algeria (45,000 tonnes) and Egypt (20,000 tonnes).
