Domestic market ensures expansion
Gazeta Mercantil - 11/15/2007
The balance of the third quarter of the Brazilian steel mills shows the force of the domestic market of steel products and the negative impact of the valuation of the Real in relation to the US dollar, mainly for companies whose operations are stronger abroad. Such trend is to continue in 2008, as have pointed out the companies themselves, which see the possibility of a high in current prices considering the continuity of the high levels of the demand growth. Generally speaking, the companies have registered a rise in their incomes as a result of the boom of sales and the rise of prices in the domestic market, which are slightly higher than those practiced abroad. An example is Usiminas, which reduced its exportations in order to cater to national customers. In a report, Brascan Corretora's analyst, Rodrigo Ferraz, pointed out that due to that fact, the earning per ton grew 2% compared to the previous quarter, collaborating for the increase of 7% in net income, to R$ 3.6 billion (US$ 2.07 billion). On the other hand, Gerdau, which has 69% of its sales from the foreign market, has suffered with the valuation of the Real, as well as with the increase of the costs of the raw materials.