Brazil steel distributor Açotubo targets $4 mln investments on prospects of higher demand, stable prices

Published by: Gabriela Brumatti<>
10 Mar 2025 @ 19:25 UTC

Açotubo, one of the largest steel distributors in Brazil, plans to invest 24 million Reais ($4.15 million) in 2025 in expectation of a marginal increase in demand, price stability and an opportunity to expand the country’s trade defense mechanisms, chief executive officer Bruno Bassi said in a recent interview with Fastmarkets.

Açotubo currently moves around 115,000 tonnes per year of steel, serving sectors such as pipes and carbon steels, connections, stainless steels, integrated solutions and anchoring systems. According to Bassi, its main clients are in the construction, mechanical projects, oil and gas, machinery and equipment sectors.
The distributor expects a 5-8% increase in sales volume in 2025, targeting the advancement of projects in the pulp and paper, mining, and oil and gas sectors in the country, in addition to an expected boost in the agricultural machinery sector.
Although the steel price scenario is not clear, Bassi said that he does not foresee the price of materials declining in the Brazilian domestic market in 2025.
Brazil’s flat steel prices were stable from mid-January to mid-February with adjustments in the near term thought to be unlikely, trade sources told Fastmarkets on February 14.
Fastmarkets’ monthly price assessment on that date for steel hot-rolled coil, domestic, monthly, exw Brazil, was 4,200-4,400 Reais ($726-760) per tonne, unchanged from the calculation on January 10.
Bassi expected steel prices to retain support principally from the exchange rate, which was expected to continue to appreciate. There is also an expectation that the Brazilian government will adopt some additional trade defense policies relevant to the steel sector, which should also benefit the market.
We believe that there is an opportunity to evolve our trade defenses, Bassi said.
Açotubo currently has 11 units in Brazil and two in other South American countries, with a large percentage of its revenues generated by the distribution sector. According to Bassi, 85% of the company’s materials is currently acquired in the domestic market from companies such as Gerdau, Vallourec and Aperam.
Executives from the Brazilian steel industry have indicated their dissatisfaction with the tariff quota policy adopted as a trade defense in the country, and have emphasized the need for an additional measure, such as an anti-dumping duty.
Continuing investigations in the country cover products such as pre-painted steel, tinplate, cold-rolled and coated flat rolled materials, and stainless steel tubes, following the similar actions initiated elsewhere in Latin America last year.
Imagining a scenario of stable prices and growing demand in the Brazilian market, Açotubo executive expect to invest 25 million Reais this year, primarily earmarked for the areas of stainless steel, acquisition of machinery and equipment, information technology and integrated solutions. According to Bassi, these are areas in which the company believes that it needs to gain capacity and improve the quality of its customer service.
A portion of the investment is also aimed at the working capital of SPG Incotep, a unit of the company headquartered in Peru and which was acquired at the beginning of last year.
In 2024, Açotubo invested 39 million Reais to acquire full corporate control of the operations of its subsidiary SPG (Systemas de Perforación y Geotecnia) in Peru and Colombia. Açotubo invested in these two countries because it saw gaps in infrastructure and in the underground mining sector that could be filled by local operations, according to Bassi.
It therefore began a minority investment in the companies in 2021 and consolidated their full acquisition in 2024. The subsidiaries’ operations are currently focused in the anchoring systems area, but Bassi hopes to expand operations in the two countries.
We are opening this study to evaluate this market for products from our distribution, he said.
Since last year, the company has defined the US as the next target for its investments. The idea would be to focus on the distribution of stainless and carbon steel with a minority acquisition, along the same lines as in Peru and Colombia.
At the moment, however, Bassi said, no target for such an acquisition has been identified.