BNamericas quoted Mr Christiano Freire president of Frefer as saying that Brazilian steel distributors'' inventories are at dangerously low levels. He added that "We are seeing stocks ending the year at a very low level. Low stocks are good news for distributors but bad news for the steel chain."
Mr Freire said that "Inventories are at about two months of consumption, when the average is 2.6 months. We began 2009 with inventories for five months and right now we are at a dangerously low level of about 650,700 tonnes."
According to distributor association Inda, stocks were at 851,700 tonnes in January and in March inventories peaked at 950,500 tonnes.
Mr Freire said that distributors in 2009 will sell 10% to 12% less than last year''s 3.71 million tonnes. He also said that distributors'' purchases are limited due to steel mills'' current difficulties producing and delivering products. He added that "Mills lost a bit of their ability to produce because of the layoffs that occurred earlier in the year and recent power outages."