The Brazilian steel institute, IABr, reports a remarkable surge in steel imports since April, propelling Brazil towards a potential all-time high in 2023, exceeding the previous record of 4.4 million metric tons imported in 2010.
In September alone, steel imports skyrocketed by 138 percent compared to September 2022, totaling 549,000 metric tons, with China contributing 56 percent of the imports.
Notably, Marco Polo Mello Lopes highlights China's rapid steel industry operation, pushing annual exports to 100 million metric tons, even as the domestic market struggles to absorb such excess production. Lopes also underscores that the Chinese government's ownership of most of the country's steel industry has led to negative profit margins, as their export prices do not align with actual production costs.
Furthermore, in September, imported steel products accounted for 23.2 percent of Brazil's apparent steel consumption, a stark contrast to the 12.3 percent average between 2013 and 2023.
IABr's forecasts for 2023 paint a challenging picture, with crude steel production expected to decrease by 5 percent compared to 2022, reaching 32.4 million metric tons. In a similar vein, exports are projected to dip by 0.3 percent to 11.9 million metric tons, and apparent domestic consumption is anticipated to decline by 1.5 percent to 23.2 million metric tons.
To mitigate the risk of steel plant closures, many of which are already running at reduced capacities, the Brazilian steel industry is urging federal authorities to implement a 25 percent import tax on steel products.
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