* Raw steel output down 1.5 pct, below revised f'cast
* Global production glut, higher materials costs hurt mills
SAO PAULO Jan 18 Brazil's raw steel production
fell more than expected in 2012, due to mild local demand,
plunging exports and an unexpectedly weak December, industry
group Instituto Aço Brasil (IABr) said on Friday.
Brazilian still mills produced 34.7 million tonnes of raw
steel last year, down 1.5 percent from the year before, compared
to the association's forecast for a 1.1 percent drop, revised in
November. Annual output fell 7.5 percent short of IABr's
original production estimate at the start of 2012.
Steelmakers in Brazil have grappled with global steel
overcapacity, rising costs for raw materials such as coal and a
glut of domestic output over the past three years.
Brazil's raw steel output in December fell 2.6 percent from
a year before to 2.6 million tonnes, its lowest level since
December 2010, when the industry produced 2.4 million tonnes.
Production of rolled steel rose 3.4 percent in December from
a year earlier to 1.9 million tonnes and expanded 4 percent in
the full year to 26.2 million tonnes.
Brazil's steel exports fell 10.4 percent in 2012 to 9.7
million tonnes, while their value fell 16.8 percent to $7
billion, according to IABr. Imports totaled 3.8 million tonnes,
in line with 2011.