The general deterioration of the country’s economic conditions has already led the local steel association, IABr, to slash its forecasts for sales and consumption in 2015.
On top of that, a money-laundering probe by the Brazilian Federal Police is leading to a slowdown in project investments, with direct repercussions for the steel sector.
The police’s Lava-Jato Operation spread to state-owned energy firm Petrobras in March 2014.
“Petrobras is one of the biggest companies in Brazil, and with the attentions of the Lava-Jato process, its large projects were stopped,” investment analyst Pedro Galdi told Steel First.
This stoppage in investments, he added, has affected Brazil’s major construction firms, all significant consumers of steel products – whether or not they were previously involved in the Lava-Jato case.
In addition, Petrobras’ suppliers, which also consume...