Brazil steel industry leader calls importers “opportunists at the stakeout”

The surge in raw steel imports, primarily from China, has initiated a new wave of discomfort among various sectors of the industry.

Steel mills argue that the situation is urgent, the sector is under threat, and “opportunists at the stakeout” are taking advantage of the moment to build up stock.

Industries that take on steel as a raw material are concerned about the possibility of higher costs and oppose the creation of a temporary 25% tariff on the metal.

Marco Polo de Mello Lopes, CEO of Aço Brasil, says that the United States, European Union, Mexico, and Chile have already established similar tariffs to protect their steel production.

According to him, the temporary tariff only became a discussion topic in the sector after a surge in imported steel volumes. From April to August, the cumulative increase was 44.7%, during which domestic sales fell by 7.6%.

From an annual average of 250,000 tons, of which 113,000 tons came from China, this year’s data, up to August, reached 496,000 tons imported, of which 300,000 tons came from the Asian country, according to Aço Brasil.

See below Brazilian imports of steel (hs 72-73) from Jan 2019 to Aug 2023. The data is from DataLiner.

Brazilian steel imports | Jan 2019 – Aug 2023 | TEU

Source: DataLiner (click here to request a demo)

Until July, the main topic of discussions at the Ministry of Development, Industry, and Foreign Trade had been reestablishing the Common External Tariff (TEC) with Mercosur.

“In June, with the surge [in imports], the alert sounded loud,” says Marco Polo. That’s when discussions with the government had to change course. The sector hopes to secure a meeting with President Lula, who is recovering from surgery, to address the issue.

Distributors, whom the representative of the steel mills calls “opportunists at the stakeout, ” bring part of the imported steel.”

Data from the National Institute of Steel Distributors (Inda) for September show a 56.4% increase in flat steel imports in August, with 69% coming from China. From January to August, the growth was 38.7%.

“Do you think those who bought steel at the lowest prices will sell it cheaper here? No, they will absorb the margin,” says the CEO of Aço Brasil.

To Painel S.A., José Velloso, representing the machinery and equipment industry, criticized the pressure from the steel sector and pointed out that even the steel mills are taking advantage to buy steel in the international market.

He mentioned Usiminas, which is supposedly buying from China and Vietnam. According to Marco Polo of Aço Brasil, steel mill purchases also come from Russia and Japan and are necessary to fulfill previous commitments. Usiminas’ blast furnace three is undergoing maintenance and is, therefore, inactive.

“Do you know why we didn’t request tariffs for plates? Because plates don’t have the weight [among the imports],” says Marco Polo.

Source: Folha de S. Paulo
Click her to access the original story in Portuguese: https://www1.folha.uol.com.br/colunas/painelsa/2023/10/importacao-de-aco-e-puxada-por-oportunistas-diz-aco-brasil.shtml

Sharing is caring!