From January to October 2023, Brazil’s crude steel production declined by 8.1%, totaling 26.6 million tons.
In contrast, during the same period in 2022, production was at 28.9 million tons. This data was released by Instituto Aço Brasil.
The institute’s president, Marco Polo Mello Lopes, discussed this decrease with journalists. He linked it to an increase in steel imports, mainly from China.
Lopes explained that China’s economic slowdown has led to a global steel surplus.
Consequently, China is selling steel cheaper to maintain its production levels and investments.
While domestic production fell, imports into Brazil rose sharply by 54.8%. In the first ten months of 2022, Brazil imported 2.7 million tons of steel.
By the same period in 2023, imports had surged to 4.2 million tons.
Instituto Aço Brasil forecasts that steel imports will reach 4.98 million tons by the end of 2023. They predict an increase to 5.98 million tons in 2024.
Lopes suggests that the federal government implement an import tariff. This measure could slow the growth of imports and support the national industry.
Lopes also highlighted the potential impact of this production drop on future investments. The steel industry plans to invest R$ 48 billion from 2024 to 2027.
However, these investments might be affected if the sector continues to decline.
Lopes recommends a 25% import tax for at least a year to eighteen months to address the import surge.
He noted that Brazilian authorities understand this issue. Lopes anticipates government action by late this year or early 2024.