Slab accounts for 75pc of Brazil's steel exports, and the US is the main destination. But despite blanket 50pc tariffs on imported steel in the US, imposed on 4 June, customs data show slab exports from Brazil to the US have risen by 9pc on the year to 3.4mn t in January-August.
ArcelorMittal is the largest slab exporter from Brazil to the US and one of only two Brazilian steelmakers that regularly ship the product overseas. The new tariffs have shifted slab trade dynamics and part of the production could be redirected to the domestic market, potentially affecting local supply.
Argus spoke to ArcelorMittal executive director Jorge Oliveira about the impact of US tariffs on exports and the consequences for Brazil's steel market. Oliveira leads the company's flat steel division. The interview was conducted in Portuguese and translated into English.
What changes have you noticed in slab trade since June, following the US' 50pc tariffs on all imported steel?
The US 50pc tariff effective 4 June levied on all steel imports is a disadvantage, but it applies to all exporters. The market adjusted to the new cost structure and slab prices have since dropped by 14pc, according to public data.
This means the slab price reflects roughly one-third of the tariff, and the US steel price reflects the other two-thirds.
Importers are still paying the tariff, but now they pay 50pc of a lower price. Export volumes to the US remain more or less stable, with only a small variation. The real impact is on pricing: Americans continue buying, but they are pushing back against paying the full 50pc tariff. That is the current market dynamic.
What is keeping export levels steady right now?
Suppliers agreed to lower their prices and keep business flowing, by absorbing part of the tariff costs with buyers. If they do not cut prices, customers might source from other regions like Asia, where the same tariff applies.
In addition, the US still needs to import slabs because they are semi-finished products that add value to their processes. Our Alabama unit recently started up a furnace with a 1.5mn t/yr capacity, but import demand remains strong. ArcelorMittal buys 4.5mn t of slab annually. This leaves a 3mn t gap. Imports from Mexico, Brazil and occasionally from within the US market cover that deficit.
The US has the capacity to increase slab production over time, but it will take a while before output is sufficient to fully meet domestic demand.
If exports to the US eventually decline, will slab production in Brazil be reduced or redirected?
We are redirecting slab production to other markets. Domestic demand for slabs in Brazil is low. There are domestic buyers, but volumes are minimal. Slab trade profitability has dropped, and it is hard to say how long we can sustain this. We hope Brazil will negotiate a new quota with the US, like in 2018, but the context is different now. Back then, Brazil had an exception, when the tariff applied only to steel. The tariff now applies to many other Brazilian products.
What is the current status of negotiations regarding a tariff exception?
Negotiations were moving forward until the announcement of a 50pc reciprocal tariff in August. Industry and trade minister Geraldo Alckmin and foreign affairs minister Mauro Vieira are leading the talks with ambassadors, handling both operational and institutional aspects. The details are with the government. I do not know what is on the table. ArcelorMittal has been providing information to support the case, highlighting our investments and operations in the US to show this is a rational necessity, not an emotional one.
Where is ArcelorMittal Brazil redirecting these exports?
We are reallocating slab exports to Europe within our own group and have recently begun selling to Turkey. Shifting markets is never easy, but we have a long-standing history in international slab sales.
Is there a possibility for ArcelorMittal to redirect some of this slab to Brazil to roll it domestically?
The biggest issue for the steel sector is not the slab tariff. The real issue is the surge in predatory imports of rolled steel into Brazil. Before Covid, import penetration averaged 10pc of market share, or about 2.2mn t. Since 2020, it has grown by 200pc. China is the main source of this unfair competition, accounting for two-thirds of steel imports into Brazil. Chinese steel imports have grown by more than 3,000pc in two decades.
How are rising steel imports affecting Brazil's steel producers?
Government safeguard measures were introduced in June 2024 and renewed in May 2025. Still, import volumes keep rising and now we have a 35pc idle capacity in Brazil's steel industry. This threatens quality jobs and investment appetite. We are completing a R25bn ($4.6bn) investment cycle by the middle of next year. The company is interested in investing another R10bn-12bn. The plan includes R4bn to produce galvanised sheets in Espirito Santo, an investment that, like others, is at risk of being postponed or cancelled because of poor import controls.
What is needed to move forward with these investments?
The key trigger is reducing predatory import penetration. If competition were fair, it would be a different story. But current import practices are causing losses.
ArcelorMittal had plans to build a hot-rolling mill in Pecem, before the acquisition of CSP (Companhia Siderurgica do Pecem). With more slabs now available, how have these plans evolved?
Where can we build a hot-rolling mill? I cannot say. We produce slabs for export in two places in Brazil — Tubarao in Espirito Santo and Pecem in Ceara. There are only two places. So there is the appetite to invest, but I cannot say where because that is our strategy.
