(Adds job losses, quote from Steel Institute president)
March 28 (Reuters) - Brazil will produce 32.9 million tonnes of raw steel in 2016, 1 percent less than last year, as the sector wrestles with an historic slump in demand amid the worst recession in a generation, the Brazil Steel Institute said on Monday.
Steel sales for the year are expected to fall 4.1 percent, to 17.4 million tonnes, President Marco Polo de Mello Lopes told reporters at the industry association’s headquarters in Rio de Janeiro.
Lopes said Brazil’s steel industry was suffering its worst ever crisis, with nearly 30,000 people laid off over the past two years. A further 11,000 steel workers are expected to lose their jobs this quarter, according to the institute’s forecast.
Worried at the prospect of little or no growth in the domestic market this year and next, Lopes urged the government to stimulate exports by giving tax breaks to steelmakers, saying Brazil’s foreign currency reserves could even be used to pay for the measures.
“It’s a war out there. Brazil cannot remain aloof,” Lopes said, referring to a global market in which numerous countries are blocking imports and increasing exports.
Reporting by Stephen Eisenhammer; Editing by Chizu Nomiyama, Bernard Orr