During the first nine months of 2023, Brazil exported 540,500 mt of carbon steel scrap, 90 percent more than the 285,100 mt exported during the same period of 2022. Considering only September, such exports increased on yearly basis by 154 percent to 93,400 mt.
According to analysts, the sharp increase of scrap exports reflects lower domestic steel production, which for its turn points to lower domestic sales that were reportedly largely replaced by imports, mostly from China and Russia.
Brazilian steel producers have asked Brazil’s foreign trade authorities to impose a 25 percent tariff for all steel imports, a claim that so far has not been accepted by authorities. Currently, the import tariff for steel products in Brazil stands in the 9.6 to 12.8 percent range.
This week, the economists José Roberto Mendonça de Barros and João Fernando Gomes de Oliveira published an article in the newspaper Valor Econômico, stating that domestic steel prices in Brazil are among the highest in world terms, as the country’s steel producers have historically based their prices on the international prices of the products after clearing customs, with additional premium that has already reached 30 percent.
In their view, such procedure affects steel consumers sectors, reducing their profitability and maintaining the per-capita steel consumption in Brazil in low levels and stagnated for more than 10 years
The economists added that the more the country is protected from steel imports, the more the margins of the steel producers are increased and the more the steel consumers pay for the product, losing competitiveness, reducing sales or even canceling operations.