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Brazil’s free gas market reaches 13.3 Mcmd with unprecedented industrial shift

Brazil’s natural gas market liberalisation has led to the migration of 13.3 million cubic metres per day, dominated by the ceramics and steel sectors, disrupting the national competitive balance.

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Brazil’s open access natural gas market has reached a major milestone with the migration of 13.3 million cubic metres per day (Mcmd) from traditional distribution channels. This shift is part of an accelerated liberalisation process, driven by a structural reorganisation of industrial energy supply. According to a recent study, this transformation has involved 68 industrial consumers, with the largest players alone accounting for more than 8.7 Mcmd, highlighting the concentration of the trend among major industrial users.

Ceramics and steel sectors lead the transition

The ceramics sector accounts for 40% of the companies that have moved to the free gas market, with demand reaching 3.3 Mcmd. The steel industry matches this volume, placing both sectors at the forefront of the transition from Local Distribution Companies (LDCs). Together, they represent 50% of the total migrated volumes.

Three suppliers dominate the competitive landscape. Petróleo Brasileiro S.A. (Petrobras) leads with 25 contracts focused on large industrial clients. Galp Energia targets medium-sized companies with 21 contracts. Edge Energia has positioned itself with a balanced strategy across segments and holds 18 contracts. These three companies together control 67% of the market share.

Regional disparity and competitive dynamics

The Southeast region accounts for 89% of the free market volumes migrating from LDCs, becoming the main battleground for suppliers. The South is expected to become the next strategic focus, while the Northeast remains difficult to penetrate due to structurally lower price levels.

Most active contracts have a duration of up to three years. Their renewal, combined with ongoing migration, is likely to intensify competition. Smaller contracts — below 0.1 Mcmd — are numerous but represent only a small portion of the total volume, confirming that large industrial consumers are driving the transformation.

A multisectoral shift in the industrial landscape

Beyond ceramics and steel, liberalisation is impacting other sectors including construction, mining, refining, fertilisers, paper, chemicals, and glass manufacturing. This sectoral diversity highlights the extent of the ongoing reshaping of the country’s energy supply structure.

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