In a bid to protect their domestic industry, Brazilian steel manufacturers are calling for an increase in import tariffs to 25% on Chinese steel products. The South American nation grapples with a significant influx of Chinese steel imports, which have surged by 49.5% in the first eight months of this year when compared to the same period last year, reaching a staggering 3.2 million tons. Of this total, a substantial 1.7 million tons originated from China.
The 48.6% increase in steel imports from China to Brazil within the aforementioned eight-month period has raised concerns among local steel producers. Carlos Loureiro, the President of the Brazilian Steel Distributors Association, highlighted a glaring price discrepancy. He pointed out that the combined cost of Chinese iron ore and coking coal stands at $342 per ton, while Chinese Hot Rolled Coil (HRC) steel is being sold at a significantly higher price of $540 per ton.
Loureiro emphasized that this $198 price difference does not account for additional expenses such as labor, transportation, equipment depreciation, energy costs, rolling processes, alloy elements, and more. Consequently, Brazilian steel manufacturers are finding it increasingly challenging to compete in the market.
The situation in Brazil mirrors similar actions taken by other countries. Mexico has recently raised its import tariffs on steel products to 25%, while Argentina maintains tariffs ranging from 12% to 20%. Additionally, the United States, Europe, and India have all implemented their own trade barriers to curtail the influx of Chinese steel imports. These measures reflect a global effort to protect domestic steel industries from the competitive pricing strategies of Chinese steel producers.
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