Brazil is on track to import a record 6.3mn metric tonnes (t) of rolled steel by year-end, industry chamber Instituto Aço Brasil said.
The domestic steel industry association sharply revised its 2025 steel import estimates in July, raising the expected annual increase to 32.2pc from a prior estimate for a 11.5pc gain from 2024, when Brazil imported 4.77mn t of rolled steel.This adds more than 1mn t in additional imports compared to the previous estimate from November.
The risk that imports, especially from China, pose to Brazil's domestic steel industry was a major theme at the Aço Brasil Congress on 26-27 August. The event was marked by highly politicized discussions, some participants said.
Government safeguard measures, including anti-dumping investigations and quotas that restrict lower tariffs, have made imports more expensive, with duties of up to 25pc applied to key seaborne products. Still, import volumes continue to rise on a monthly basis.
Buyers in the north and northeast continue to favor imports despite a 25pc tariff because the regions have no rolling mills. Steel from the southeast of the country is more expensive because of high freight charges and heavier taxation on cross-country transport.
State-level tax advantages have increased steel imports through two of the country's main entry ports — Manaus in the north and São Francisco do Sul in the south. These incentives add another layer of pressure on the domestic industry, Aço Brasil said.
Brazilian buyers also remain wary of potential supply shortages from domestic mills, a scenario that has occurred in the past and led to price spikes. As a result, some prefer imported steel, even if delivery times are longer.
Importers also benefit from cheaper credit offered by foreign-based trading companies, which provide lower interest rates than those available in the Brazilian financial system.
Total imports now represent 30pc of domestic steel sales, comparable to what 10 mini mills in Brazil produce in a year. Import penetration will increase to 22pc in 2025 from 18pc a year earlier, Aço Brasil estimated.
In addition to direct imports, the industry is also assessing the impact of indirect imports through finished products that contain steel.
Brazil is expected to import more than 6mn t of steel manufactured products by the end of the year, Aço Brasil said. This estimate assumes that the pace of imports observed between January and July 2025 will continue through the remainder of the year.
The new US tariffs on many of these products also threaten domestic steel buyers in Brazil's manufacturing sector, which could potentially lead to a drop in demand.
Brazil's steel industry also raised its projections for apparent consumption. This is the measure of production and imports minus exports. Production and domestic sales estimates remained largely unchanged at 36.6mn t and 21.1mn t, respectively.
Apparent steel consumption in Brazil is expected to grow by 5pc to 27.4mn t this year, compared with a previous forecast of a 1.5pc increase made at the end of 2024, Aço Brasil said. Exports are set to increase to 9.6mn t from 9.5mn a year earlier, despite tighter import restrictions in the US.
