Mills call for 'more efficient' steel import controls in Brazil following government decision

Brazil's steel mills have called for "more efficient" measures to stem record-high steel product imports, mainly from China, after the Brazilian government opted to renew and extend an existing import control system.

Brazilian Steel Institute Aco Brasil said May 28 that it has become "absolutely necessary to adopt more efficient commercial defense measures in face of the persistent and worrying growth of imports which threaten the Brazilian steel industry."

On May 27, Brazil foreign trade body Gecex has renewed from May 31 for one year an import control system, which imposes a quota on imports of selected steel products, which will then become subject to a 25% import tariff once the quotas are filled.

Gecex, part of Brazil's development, industry, trade, and services industry, has also extended the range of import controls to a broader number of steel products, from the existing 10 product categories under Mercosul trade regulations to 14 product categories, effective May 31. The new system will cover a total of 23 product types.

Aco Brasil described the decision as "positive" because some kind of protection needs to be in place.

It noted that due to government and industry monitoring of imports over the past year since the control system was introduced on June 1, 2024, trade circumvention had been noticed in the additional four product categories, allowing them to avoid the existing quotas and tariffs upon entry into Brazil. This has now led to their inclusion in the extended system, the institute said.

Brazil's existing tariff and quota system has been branded as ineffective by steel producers including Gerdau Group, CSN, Usiminas and ArcelorMittal Brasil, some of which have threatened to reduce their investments in Brazil unless the government takes a firmer stance on imports.

In 2024, steel products imports into Brazil grew 18.6% over 2023 levels, to 6 million mt, followed by a further 27.5% on-year growth in Jan-April 2025, reaching 2.2 million in the four-month period and accounting for up to an "unacceptable" 25% of domestic market sales, Aco Brasil stated.

The import quotas currently being operated include existing tariffs, mainly 10.8 - 12.6%, which steelmakers consider relatively low.

Brazilian Steel Distributors' Institute Inda said last week it was expecting Brazil to impose a blanket import tariff of 25% on imports of all steel products, in line with measures taken by the US and some other nations.

Osvaldo Sicardi of Rio de Janeiro-based steel trader Imexbra Trading SA indicated May 28 that Brazilian mills are expected to continue to face competitiveness problems, not only because of the continuation of the existing import control system, but due to other factors including the nation's high interest rates.

"It's clear imports are greatly impacting the domestic market," Sicardi said in an emailed statement. "The mills just can't compete because they have to bear an incredibly high 'Brazil cost' in the logistics, financial and labor union areas."