Brazilian hot-rolled coil (HRC) prices declined throughout 2025, despite solid economic growth and steady demand in most sectors, with prices ending the year lower because of pricing competitionbetween domestic and imported HRC.
Argus-assessed imported HRC cfr Brazil dropped to $515-550/metric tonne (t) on 11 December, down from $535-555/t on 2 January. Argus-assessed HRC ex-works fell to R3,600-3,900/t ($655.80-702.80/t) in the latest assessment compared with R4,000-4,300/t at the start of the year.
Brazilian mills resisted pressure from a rising influx of lower-priced imports stemming from an oversupply in China, holding prices steady for the first five months of the year.
But mills yielded to price cuts in June, when price spreads were as much as 38pc higher than imports. Buyers were able to secure deals below R3,400/t in July, market participants told Argus.
Tighter safeguard measures around the world and anti-dumping actions targeting Chinese material helped redirect steel to countries with looser trade defenses, including Brazil.
Imports hit an all-time high of 6mn t in the year through November, up by 7pc from the same period last year, industry chamber Aço Brasil said. These volumes added to domestic production and boosted apparent consumption — the sum of production and imports minus exports — by 2.5pc to 24.8mn t year-to-date November.
Service centers and trading companies took advantage of the lower import prices to build up their inventories. High stock levels ultimately weighed on demand and dragged down offer levels.
Domestic and import sellers were forced to slash prices in June to spur buying interest in an already oversupplied market. Import HRC prices slipped below $500/t in July.
Sales up
The Brazilian real strengthened by 14.2pc against the dollar year-to-date mid-December, boosting import competitiveness for 2025. Imports offered another advantage beyond pricing: lower financial costs from international trading firms.
Brazilian mills rarely operate on credit, and even if they did, borrowing costs in Brazil reached their highest level in 20 years in 2025.
Brazil's 15pc target interest rate, which spurs higher commercial lending rates, has dampened end-user demand, but not enough to slow steel consumption significantly.
Despite the rising import flows, domestic sales remained stable on the year at 19mn t year-to-date November, Aço Brasil said. Full-year 2025 domestic sales are expected to match the high-21mn t level of a year earlier, which was the highest since a demand surge during the pandemic.
Brazil's gross domestic product grew by an annualized 2.7pc through September, Brazil's statistics bureau IBGE said, on track to beat the central bank's full-year growth forecast of 2.25pc. The solid economic growth has supported steel demand, especially in the construction and automotive sectors.
Real estate construction starts jumped to 307,366 units year-to-date September, up by 8.4pc compared with the same period in 2024, the Brazilian construction industry chamber (CBIC) said. Real estate sales rose 4pc to 312,240 properties over the same period, CBIC data show.
The Minha Casa Minha Vida low-income housing program accounted for nearly half of both sales and new units.
Brazil produced 2.46mn vehicles in January-November, up by 4.1pc year-on-year, automaker association Anfavea said. Registrations rose 1.4pc to 2.1mn units over the same period, while automobile exports surged by 39pc to 510,130 units, driven by higher shipments to Argentina, Colombia and Chile.
The annual drop in HRC prices in Brazil was driven less by demand and more by fierce competition between domestic producers and import suppliers, which pushed prices lower despite stable consumption.
Brazilian HRC prices are expected to remain under pressure in early 2026 as high inventories and competitive import offers persist, a trader said. A modest recovery is expected in the second half of the year, depending on stronger domestic demand and potential trade defense measures, market participants told Argus.
