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The fall was more pronounced than the 1.1% drop forecast by IABr at the end of November.
In December alone, crude steel production came down by 2.6% to 2.6 million tonnes, the association said late on Friday January 18.
Alacero, the Latin American steel association, reported last week an estimated output of 35.06 million tonnes of crude steel in Brazil, as it believed December production had risen by 12% to nearly 3 million tonnes.
Finished steel output, however, increased by 4% in Brazil, to 26.23 million tonnes from 25.23 million tonnes, IABr said.
Production of flat steel totalled 15.44 million tonnes in the year, up by 8.3%, while long steel output fell by 1.6% to 10.79 million tonnes, the figures showed.
Rolled steel output in December reached 1.94 million tonnes, a 3.4% increase, of which 1.27 million tonnes were flat products (up by 13.4%) and 670,100 tonnes were longs (down by 11.3%).
Brazilian steelmakers produced 34.68 million tonnes of crude steel in 2012, a 1.5% decrease from the total output in 2011, according to new figures from the local steel association, IABr.