Credit rating agency Moody’s said on March 2 that the proposed 25 percent import tariff on US steel imports will have “mixed” implications for the Brazilian steelmakers.
“The impact of a 25 percent tariff hike in steel announced by the US is manageable but varies for each of the major Brazilian producers,” the agency said.
Moody’s said about 30 percent of Brazilian steel exports are destined to the US, but most of those exports are made up of semi-finished steel products. In 2017, exports represented only about 25 percent of total flat steel produced in Brazil, and about 21 percent of long steel produced in the country was exported.
As for local flats steelmaker Usiminas, the impact of the US import tariffs will likely be limited. Out of Usiminas’ total steel sales volumes, only 15 percent are exports, and the company’s steel exports to the US are not significant. Usiminas has been targeting most of its flats exports to Europe and Argentina.
Brazilian steelmaker Companhia Siderurgica Nacional (CSN) exports about 5 percent of its total sales volumes.
As for integrated steelmaker Gerdau, the effect of the tariffs should be positive, since the company's operations within the US account for 42 percent of Gerdau's consolidated revenues.