In Brazil, the steel sector is one of the last vestiges of a bygone industrial golden age. Taking advantage of the country’s significant iron reserves, numerous companies such as the National Steel Company (CSN), Gerdau, Usiminas and ArcelorMittal emerged during the 20th century.e century, making Brazil the steel leader in Latin America and the 9e global producer.
But, since the end of 2022, the sector has been facing an existential threat: competition from Chinese steel. In China, a strong real estate crisis is causing demand to fall, pushing steel companies to look for new outlets for their surplus production.
Due to the proliferation of customs barriers in the United States and Europe, the latter have had to turn to alternative markets. Brazil then emerged as a substitute of choice: the country is the largest consumer of steel in Latin America, due to strong demand from automobile manufacturers and construction companies, which are particularly fond of this material.
In 2023, 2.9 million tonnes of Chinese steel came to occupy 26% of the Brazilian market, causing imports to jump: in total, these increased by 50% between 2022 and 2023, according to the Brazil Steel Institute, which represents the main steel companies in the country.
“It’s impossible to compete”
As a result, domestic steel production fell 6% over this period. “Several companies have had to close factories, lay off staff [5 000 emplois ont été détruits] and interrupt their investments”, worries Marco Polo de Mello Lopes, executive president of the Brazil Steel Institute, from his headquarters in central Rio de Janeiro.
“It is impossible to compete with China,” assures Luis Fernando Martinez, executive director of CSN, the largest Brazilian steel company. The coated steel sold by the multinational, mainly used to make cans, costs “40% more” than its Chinese equivalent, calculates Mr. Martinez. Assuring that China is subsidizing its steel companies, CSN requested an investigation into “dumping” against several Chinese products from the Brazilian Ministry of Development, Industry, Foreign Trade and Services (MDIC) in March.
The Brazil Steel Institute also called on Lula’s government, which is committed to “reindustrialize Brazil” under his mandate, measures aimed at protecting the sector. After several months of negotiations, on April 23, Geraldo Alckmin, the vice-president and minister of the MDIC, finally announced the doubling, for one year, of customs duties (from 10.8% to 25%) on 11 of the 273 steel products (regardless of their origin).
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