Steel exports add to Brazilian trade surplus

Steel exports add to Brazilian trade surplus

Brazil's Ministry of Trade announced that the country exported $10.4 billion worth goods in the first six weeks of 2005, resulting in $3.2 billion trade surplus. Exports fell 15% in the second week of February compared to the previous year. Manufactured and semi-manufactured steel exports helped Brazil to a $425[c1] million daily average of exports in the second week despite the 15% decline. Sales of basic resources such as iron ore and crude oil dropped 52%, while semi-manufactured steel and iron goods dropped 12% from the same week of 2004. However, considering the first two weeks of February together, Brazil's average daily exports of $426 million were 34% higher than the same period in 2004. Iron and steel wire, flat laminated steel and auto-parts exports increased 49.1% from February 2004. The 32.7% increase in the exports of semi-manufactured steel products yielded $65 million. The Brazilian government expects to export 30 million tons of steel, which is almost equal to Brazil's entire 2004 production, to China in 2005. Brazil produced 32.9 million tons of steel in 2004. Meanwhile, clashes continue in the Brazilian senate regarding the reduction of import tariffs on steel products. The Workers' Party blames high steel prices for inflation and high interest rates. The Party claims that consumers bear the brunt of the sharp rise in steel prices because household appliance and automobile manufacturers simply pass along the rising costs of raw materials to them. In addition to Japanese and European steelmakers, the government of Brazil is also concerned about CVRD's proposed 90% increase in the price of iron ore.