The aluminium industry in Brazil could see further adjustments in 2016, with some participants struggling to keep financially healthy while operating on very tight or even negative margins.
"There are many medium and small-sized companies about to close their doors [go bankrupt], and even larger ones are having troubles," one trader said.
One aluminium profiles producer reported being able to make only about 0.20 cents of a Brazilian Real of margin in most of its sales, while in other deals the margin has been non-existent or even negative.
"We have a good cash and credit position and a very disciplined strategy, which have helped us survive the crisis. But it is definitely not easy," the source said, citing poor end-user demand and increased costs due to the stronger US dollar.
Credit allocation has become more selective in Brazil as a result of the country's economic crisis and the...