Page 5 - Anuário Sindifer 2020

President’s Message

Dear Sirs,

Once again, we are pleased to present to you the Statistical Yearbook for 2020,
encompassing the main numbers and references of the pig iron industry in the year of 2019.
The figures cover both Minas Gerais and Brazil performances.

In terms of production and commercialization, the year was indeed good for the sector,
and it is worth to highlight initially the growth of 11.4% in Minas Gerais, confirming thus a
trend since 2016.
This growth was leveraged by the exports that represented 64.1% of the total
commercialization, reversing the last year trend when the national market was more
significant.

A relevant fact was the return of China as an importer of pig iron from Minas Gerais,
as of the third four-month. Even that had it been only part of the period, the tonnage
embarked made the country the second biggest buyer of Minas pig iron, behind only United
States.

In the opposite direction of exports, in Minas Gerais, sales to national market dropped
by 22.2% pulled by the drop in steelworks production.

Pig iron production in Minas Gerais represents roughly 76% of total production in
Brazil.

Despite the growth and the opening of new markets, the year was not that easy and
the sector had to get along with some adversities. Among them, a significant raise in costs of
basic inputs, loss in quality, drop in supply of iron ore and drop in international prices of pig
iron, what basically eliminated the possibility of margins.

Regarding the sustainability, the sector continues to be present in all the improvement
projects developed by the sector.

There is a good expectance for 2020 since the exports are at a good level and this
guarantees a first quarter better than it was in 2019. There is also an expectance that the
national market will recover its growth bias.
Greetings,

Fausto Varela Cançado

2