INTERVIEW: Rebar imports on radar for Brazilian construction companies: CBIC president

After a year of construction sites in full operation, particularly in Brazil's main capitals, the president of the Brazilian Chamber of the Construction Industry (CBIC), Renato Correia, said that cost increases impacted the sector last year. In this context, importing steel rebar, which caught the attention of Brazilian steelmakers in 2024, remains an option for Brazilian buyers, he added. In an interview with S&P Global Commodity Insights, Correia summarized some of the sector's obstacles and his expectations for 2025.

Brazil imported 216,446 mt of rebar and wire rod in 2024, up from 148,273 mt in 2023, according to the Ministry of Development, Industry, Commerce and Services (MDIC). Last year, the main supplier was Egypt, with 149,235 mt, followed by Peru (35,885 mt), Russia (17,080 mt) and Turkey (12,561 mt). According to sources, imports represented close to 5% of total long steel domestic consumption, considering roll and bar material.

Platts, part of S&P Global Commodity Insights, assessed the weekly Brazilian domestic rebar price as unchanged at Real 4,150/mt ($684.82/mt) ex-works, taxes excluded, on Jan. 17, based on a Real 4,000-4,300/mt range amid deals, offers, and bids. In the year, even in the face of demand restrictions in the domestic market, Brazilian domestic 10 mm rebar jumped from Real 3,750/mt FOT in January to Real 4,150/mt FOT in December, up almost 11%.

Commodity Insights: How do you assess the performance of the Brazilian construction sector in 2024?

Renato Correia: The Brazilian construction sector has shown impressive performance in 2024, with growth of 4.1%, surpassing the stability observed in 2023. This advance was driven by the dynamism of the national economy, the resumption of the Minha Casa, Minha Vida housing program, and a favorable election year.

The sector has generated more than 200,000 formal jobs, increasing the total number of workers to 2.948 million, and recorded significant increases in launches (17.3%) and sales (19.7%) in the real estate market.

However, challenges such as high interest rates, which reduce savings and divert investments to the financial market, along with increased costs, with the INCC (National Construction Cost Index) rising 6.54% and the workforce growing 8.56%, have put pressure on the sector. For 2025, continued high interest rates and the impact of the US dollar on input prices remain significant challenges.

CI: We saw how the Minha Casa Minha Vida popular housing program helped drive demand in the sector, as well as high-income projects. What is needed for demand in the country's construction to be stronger, dynamic, and constant?

Correia: In addition to the resumption of Minha Casa, Minha Vida and the strength of the high-income market, strengthening demand requires actions on several fronts. Reducing interest rates and expanding access to credit are essential to facilitate housing and infrastructure financing, ensuring greater liquidity for the sector.

It is also important for the country to invest significantly in infrastructure and logistics, optimizing efficiency and reducing operational costs. Furthermore, increasing the population's income is necessary, as greater purchasing power generates consistent demand for housing and construction services.

CI: How has CBIC, as an entity, worked to ensure the growth of the segment?

Correia: CBIC has been actively working on several fronts to promote the development of the sector. We engage with the government, parliament, and judiciary to discuss important issues for the country, such as tax reform, the sustainability of the FGTS [the Service Time Guarantee Fund, the main financier of housing in Brazil], and excessive litigation. We also promote professional qualification programs to meet the demand for qualified labor and conduct market studies, among other actions.

CI: What has been the impact of domestic steel prices on companies in the sector? Is importing 10 mm rebar, one of the main construction materials, still a solution for some companies in the segment?

Correia: Steel is an important component in civil construction. Given this, some companies have resorted to importing rebar, especially from countries like Turkey, as a strategy to reduce costs. This practice can continue to be a viable alternative, provided logistical and material quality issues are considered.

CI: What is CBIC's main focus in 2025? What are your expectations regarding the sector and Brazil?

Correia: CBIC's main focus is on improving the business environment, with innovation, sustainability, and expansion of investments in the sector, aiming to reduce the housing and infrastructure deficit in the country.

Expectations for 2025 indicate an initial projection of 2.3% growth, following a 4.1% increase in 2024. Despite the challenges, we remain optimistic about the sector's potential to contribute to Brazil's economic and social development.