As prospects for Brazil’s steel industry remain bearish, with some of major producers such as Gerdau posting losses in the billions amidst a scenario of diminished domestic demand, the nation’s steel association, IABr, has once again claimed for more actions from the government side.
IABr’s president, Marco Polo, said only the government could save the struggling steel industry.
“The government needs to do what everyone in the world is doing: implement measures to protect its domestic market,” the executive said in an interview with the Brazilian press.
Despite meaning some relief for exporting producers such as Gerdau and CSN, which have their own US subsidiaries, the increase of the USD over the BRL isn’t being enough to aid the Brazilian steelmakers, said Polo.
“The devaluation of the BRL didn’t impact so much the steel industry because the currency of some of the major [exporting] countries, which are [our] competitors in the sale of steel depreciated as well, and in some cases, even more when compared to the BRL,” he argued.
“We defend isonomic conditions for competition, so we can preserve the domestic [steel] market from unfair and predatory practices, especially from China,” Polo said.
Brazil’s steel industry, which has been distant from Brazil’s government in terms of a sector-wide dialogue, has tried to ask the government for help.
A Brazilian minister said in H2 last year the nation had no stimulus package for the country’s steel industry, despite declining sales and rising concerns about the loss of competitiveness of the segment.
In a move to help the nation’s steel industry, a group of four major producers in Brazil, Gerdau, CSN, Usiminas and ArcelorMittal, along with IABr, asked for the government’s help in a meeting held in September 2015.
After the meeting, the government considered and even suggested a hike in Brazil’s imports tariff. It then created a joint commission to study and aid the challenges the domestic steel industry has ahead.
So far, no decision on the proposed hike in the imports tariff was taken.
Several industry segments, including the nation’s association for the machinery industry, opposed the move by saying it’d blow the “already struggling competitiveness of the transforming industry, which uses the steel to manufacture its products.”
Technicians from the government who analyzed a proposed hike in Brazil’s imports tariff have opposed the move as well. They said the crisis the nation steel sector is passing through isn’t related to the increase of steel imports. The technicians argued Brazil is already adopting AD duties to protect the sector, and that a hike in the imports tariff would result in higher prices for steel domestically.
Talking to SteelOrbis and other reports in the sidelines of the Alacero conference, held last year in Buenos Aires, Argentina, from November 10-11, Jefferson de Paula, Alacero’s new president, said IABr, Brazil’s steel institute, was already working with local government to protect the domestic steel segment.
“We need to have a provisional protection for the nation’s steel industry. I’m not defending a country, which is closed to global trade, but I support the idea that we need sometimes to protect our markets,” he said, while talking to reporters.
When asked by SteelOrbis what IABr is doing in terms of negotiations with the government, Paula, who’s also part of the council of the trade group, said it is “urging for measures to protect the country against the unfair trade.”
“If the trade isn’t far, then we’ll keep working. If I’m going to export just to lose money, then I won’t export at all. Our strongest competitor in Latin America is the Chinese government, which is working through Chinese steelmakers,” he argued.
“The government should take actions. We can’t do anything. It’s the government the one who should take action,” he said.
Recently, Brazil imposed provisional AD duties on seamless pipe imports from China. It also extended AD duties to include boron-added heavy plate from China.