AGP Executive Report

Energy: Petrobras reported a third oil discovery near the mouth of the Amazon, while regular bioethanol bunkering has begun at the Port of Santos, adding a lower-carbon fuel option for shipping. Agriculture: Brazil’s soybean crop could shrink nearly 10% under El Niño, according to a new study, even as export demand remains strong. Manufacturing & Minerals: Wabtec marked a major milestone at its Brazilian manufacturing plant, and India-Brazil trade discussions put critical minerals among the priorities as bilateral commerce targets $20 billion. Power Infrastructure: Brazil plans to auction R$8.9 billion in transmission projects, offering a pipeline of investment in the electricity network.

Energy: Petrobras reported a third oil discovery at the mouth of the Amazon, while regular bioethanol bunkering has begun at the Port of Santos. Power Storage: Brazil’s battery pipeline is in focus: the country has 56 GW of proposed grid connections, and its first battery auction is testing the economics of local content. Manufacturing: Wabtec marked a major milestone at its Brazilian plant, underscoring the country’s role in the company’s industrial operations. Agriculture: A study warns El Niño could cut Brazil’s soybean crop by nearly 10%. A Newcastle disease outbreak is also drawing attention to poultry exports, though South Africa says it will not impose a blanket ban.

Mining: St George Mining expanded its Araxá niobium and rare-earth resource to 111.2 million tonnes, while Nexa reported 90% September utilization at its Aripuanã plant. Investment: Brazil drew a record $42.4 billion from emerging-market funds ahead of the election. Malaysian investor 10 Cents Capital also plans a phased launch of AI, marketing and cross-border trade businesses, starting in Brazil. Agribusiness: A study warns a strong El Niño could cut Brazil’s soybean crop by nearly 10%. A Newcastle disease outbreak has raised concern for poultry exports, though South Africa says it will not impose a blanket ban. Energy: Brazil’s green hydrogen project pipeline is valued at $23 billion, but infrastructure and offtake remain hurdles; agribusiness bioenergy already supplies 29% of the country’s energy mix.

Mining: Nexa reported third-quarter adjusted EBITDA of US$301 million, up 62% year over year, as its Aripuanã plant reached 90% utilization in September; a non-cash impairment weighed on results. Power and Energy: Brazil plans to auction R$8.9 billion in transmission projects, while an industry group says 56 GW of battery connection capacity is in the pipeline. Green hydrogen developers have a potential US$23 billion project pipeline, but infrastructure and buyers remain hurdles. Steel and Manufacturing: Gerdau plans an overhaul in Brazil, supported by stronger US profits, as the shoe industry loses export ground amid rising imports. Agribusiness: Bioenergy now accounts for 29% of Brazil’s energy mix. South Africa ruled out a blanket ban on Brazilian poultry after a Newcastle disease outbreak, limiting import curbs to affected premises. Financial Services: Itaú and Binance have applied for Brazilian crypto-service licenses ahead of new regulations, as tighter compliance rules push smaller firms out of the market.

Energy Storage: Brazil has 56 GW of available grid connection capacity for batteries, far above the 4.5–10 GW expected to be needed by 2030, setting up strong competition for the first storage auctions. Power & Clean Industry: The government plans to auction R$8.9 billion in transmission projects, while a proposed $23 billion green hydrogen pipeline faces infrastructure and offtake hurdles. Brazil is also courting data-center investment using its renewable power. Manufacturing: Gerdau plans a Brazil overhaul, and BYD is expanding local production; South Korea’s Boditech Med and Brazil’s Biosys will set up local diagnostics manufacturing. Agribusiness: South Africa will keep importing Brazilian poultry, restricting shipments only from sites affected by Newcastle disease, despite a third outbreak in Santa Catarina. Costs: Economists have raised Brazil’s 2027 inflation forecast by 0.5 percentage points as high energy prices threaten to prolong price pressures.

Clean Energy: Agribusiness bioenergy supply rose 16% from 2022 to 2025, but its share of Brazil’s energy mix held at 29%. A proposed $23 billion green-hydrogen project pipeline faces infrastructure and buyer-demand hurdles. Power Infrastructure: Brazil plans to auction R$8.9 billion in transmission projects, while a first battery auction will test whether local-content rules can support storage investment. Manufacturing: BYD is expanding Brazilian production, with supplier Nexteer opening a Camaçari plant to make steering systems for the automaker. Exports: Six Brazilian beauty-ingredient companies are heading to an Asian trade show to pursue new customers and markets. Logistics: Coty is shifting freight from air toward sea and rail, and has put three electric vehicles into service between its Goiânia factory and distribution center. Industry Outlook: Gerdau plans an overhaul in Brazil, while the country’s footwear sector is losing export ground as imports rise.

Agribusiness: Brazil’s soymeal exporters face a new challenge from EU deforestation rules due to take effect on Dec. 30. The industry warns traceability hurdles could put up to 4 million tonnes of exports at risk, while Argentina sees a chance to gain market share. Critical Minerals: Anglo American’s Brazil chief urged the government to clarify how its new mining rules will work, saying predictable policy is key as the country courts buyers across competing global blocs. Energy: Brazil’s solar association has proposed an 8 GW storage target by 2030, as the country’s first battery auction tests the economics of local content. Manufacturing: BYD is doubling production in Brazil, while supplier Nexteer has opened a Camaçari plant to make steering systems for the automaker. Offshore Engineering: SLB OneSubsea has completed an all-electric subsea technology project in Brazil, a step toward electrifying offshore operations.

Industrial Policy: Lula’s re-election opens the door to recalibrating Brazil’s industrial policy, as investors await signals from his economic team. Power & Storage: Brazil’s solar association proposed an 8 GW storage target by 2030, while the country’s first battery auction tests the economics of local content. AXIA is also centralizing hydropower operations. Agribusiness & Logistics: A second Newcastle disease case has put poultry exports under pressure. A new grain-terminal lease at the Port of Santana could strengthen export capacity. Jobs & Finance: Construction was Brazil’s only major sector to increase net hiring through August, adding 200,400 jobs, with infrastructure projects leading growth. The Central Bank sees no significant threat to financial stability, but household loan delinquency has reached its highest level since 2012.

Agriculture: Soybeans edged higher as Brazil’s real steadied after its sharp post-election drop. Weather concerns in southern and central Brazil could also affect planting. Energy Storage: Absolar proposed 8 GW of large-scale storage by 2030, with regular battery auctions, tax relief and compensation for curtailed renewable power. December’s auctions will test whether local suppliers can meet domestic-content rules. Offshore Energy: OEG signed a seven-year deal to supply 50 chemical tanks for offshore operations in Brazil, securing long-term equipment access for a new customer. Biofuels: The Port of Santos has begun regular ethanol bunkering, opening a new route for Brazil’s biofuel industry. Business Outlook: Lula’s reelection leaves industry facing a tougher policy environment: a right-leaning Congress and fiscal constraints could complicate investment and economic plans.

Markets & Policy: Lula’s surprise reelection triggered a sharp selloff in Brazilian assets: stocks fell about 14% and the real weakened 8.5% as investors unwound bets on a Bolsonaro win. Debt concerns and a Congress dominated by the right could constrain Lula’s spending and investment plans. Energy & Industry: The new term begins with fresh investment signals: the European Investment Bank detailed €150 million for Brazil’s power grid, while WEG completed certification of a 7-megawatt turbine. Amazon & Mining: Mura residents say roadwork for the Potássio Autazes project dried up sacred springs and threatens water and food sources; the company disputes the claim, with licensing challenges still pending.

Markets: Lula’s narrow re-election rattled investors: the real and soybean futures fell, while Brazil’s high public debt, interest rates and inflation remain key risks for his next term. Auto Manufacturing: Nexteer opened a Camaçari plant to supply steering systems to BYD, while Horse Powertrain launched a cylinder-head foundry in Brazil, adding local capacity for vehicle production. Mining: Sigma Lithium restarted its Grota de Cirilo operation after its environmental licences were reinstated, producing 7,090 tonnes of concentrate from October 5 to 22; it targets annual output of 330,000 tonnes by end-2027. Power and Transport: EIB and Neoenergia backed a €342 million grid upgrade, and Brazil outlined new freight, passenger and urban rail concessions. Trade and Agriculture: The EU-Mercosur agreement is set to reduce tariffs across industrial and farm goods, while Brazil’s soybean meal export discount to Argentina widened ahead of Lula’s win.

Presidential Runoff: Polls closed after a two-hour Supreme Court extension, and counting resumed in Brazil’s close Lula–Flávio Bolsonaro race. The result could shape investment, energy policy and Amazon protections. Auto Manufacturing: Nexteer opened a Camaçari plant to supply BYD, while Chinese automakers are driving more robot use on Brazilian factory floors—an expanding EV supply chain. Transport & Energy: Brazil outlined rail concession plans for freight, passenger and urban services. Copersucar signed its first commercial ethanol supply deal for ships, and the country registered its first pumped-storage project under new rules. Agribusiness: USDA forecasts Brazil’s 2026–27 soybean crop at 184 million tonnes. Morocco also approved Brazilian buffalo imports, extending a livestock trade relationship. Mining & Environment: Brazil’s Supreme Court suspended a permit for a major Amazon gold mine, putting Indigenous rights and project development back in focus.

Trade Links: Brazilian companies in offshore oil and heavy construction are planning business missions to Vietnam in early 2027, while industry groups are pushing for a Mercosur–Vietnam trade deal. Agribusiness: EU beef imports are forecast to rise 5% this year, helped by Brazilian shipments sent before the bloc’s September ban. Manufacturing: Chinese automakers are expanding local production, with BYD moving from imports to manufacturing in Brazil. Investment: Hitachi plans to invest R$385 million in a São Paulo expansion, and Brazilian industrial AI firm Tractian raised US$130 million to scale its business. Clean Energy: A regional study identifies regulatory uncertainty, weak infrastructure and costly financing as major barriers to renewable-energy investment in Latin America.

Brazil’s Runoff: Lula and Flávio Bolsonaro closed their campaigns ahead of Sunday’s tight vote, with Brazil’s economic direction and industry agenda in focus. Retail Investment: YSL Beauty opened its first Brazilian store in São Paulo, its first in South America, betting on the country’s large fragrance market and demand for in-person shopping. Agribusiness: Brazil supplied more than 90% of Morocco’s imported slaughter cattle this year, and the country’s 300,000-head duty-free quota has been exhausted. Brazil’s 2026–27 soybean crop is forecast at 184 million tonnes, while wheat imports may reach a 30-year high as the harvest shrinks. Manufacturing: Hitachi plans a R$385 million expansion in São Paulo, while Nexteer opened a Brazilian plant to supply steering systems to BYD. Industrial AI firm Tractian raised US$130 million to scale its business. Energy and Materials: Brazil’s first industrial gas auction sold out, though costs remain high. Copersucar signed its first deal to supply ethanol to ships, and CSN is nearing a R$15 billion sale of its cement business.

Industrial Investment: Hitachi will invest R$385 million to expand in São Paulo, while Brazilian industrial AI startup Tractian raised US$130 million at a US$1.4 billion valuation. Chinese automakers are also stepping up local production, with Nexteer opening a plant to supply steering systems to BYD. Agribusiness: Brazil’s 2026–27 soybean crop is forecast at 184 million tonnes, up nearly 2%, though severe weather could disrupt harvests. A Mercosur-EU deal could lift fruit exports, while poultry trade faces fresh restrictions after a Newcastle disease outbreak. Energy & Infrastructure: Brazil’s first industrial gas auction sold out, but costs remain high. EIB and Neoenergia are backing a €342 million grid upgrade, and Copersucar has signed its first commercial deal to supply ethanol to ships. Mining & Materials: Sigma Lithium extended US$100 million in debt to June 2027 as it ramps up production. CSN is nearing a R$15 billion sale of its cement business. Infrastructure Debate: In the final presidential debate, Flávio Bolsonaro cited 100,500 stalled construction projects; Lula pledged to complete unfinished works.

Fruit Exports: Brazilian fruit shipments reached US$1.17 billion through September, up 17.5% year on year, and could set a record in 2026. Lower EU tariffs under the Mercosur deal are helping exporters expand sales. Factory Automation: Brazil installed nearly 4,300 industrial robots in 2025, up 38% from 2024, with almost half going to car plants. Chinese automakers are driving investment, while Nexteer has opened a Camaçari plant to supply steering systems to BYD. Lithium: Sigma Lithium has resumed Brazilian operations and extended US$100 million in debt to June 2027, giving it more time to produce and generate cash. Power Infrastructure: The first Brazilian industrial gas auction sold out, though costs remain high. Separately, Neoenergia secured backing for a €342 million grid upgrade.