The Brazilian steel institute, IABr, is asking local authorities to increase the import tariffs on steel products, from a current range of 9.6 to 12.8 percent, to 25 percent, as an alternative to reduce the volume of imports, chiefly from China.
This range was recently increased by 10 percent, in a variation considered as insufficient by the industry. Between January and August, the volume of steel imports in Brazil has increased on yearly basis by 49.5 percent to 3.2 million mt, of which 1.7 million mt from China, a 48.6 percent increase.
According to Carlos Loureiro, president of the Brazilian institute of steel distributors (INDA), Chinese steel producers are operating at negative margins, as their combined costs of iron ore and coking coal is $342/mt, while they are selling HRC at $540/mt. In his view, the balance of $198/mt is not sufficient to cover costs of labor, freight, depreciation, alloying elements, energy, rolling and others.
Loureiro added that Mexico has recently increased the import tariff for steel products to 25 percent, Argentina has tariffs in the 12 to 20 percent range, while the US, Europe and India have their specific barriers for steel imports from China.