Posted on 23 May 2024
The Brazilian steelmakers will invest BRL 100.2 billion ($19.5 billion) in production expansions, upgrading their processes and decarbonisation projects over the next five years. The announcement originates with Brazil’s President Luiz Inácio Lula da Silva this week, although he did not provide any details about which companies are planning to do it.
Lula says the actions will strengthen and improve the industry's competitiveness.
Market participants tell Kallanish that the sector previously announced major projects and these are already underway. They consider Lula's announcement a political manoeuvre to calm the sector's demand for the imposition of protectionist measures that promote competitiveness and protect investment in recent years.
Among the government actions to encourage the steel sector is the recent decision to impose quotas on 11 steel tariff fractions and increase the import tax to 25% to be applied when the volumes are exceeded.
The duties will be applied to imports of flat-rolled coils under HS chapters 7208, 7209 and 7210, whose quotas are fixed respectively at 185,983 tonnes, 301,679t and 937,801t. The maximum volume for free wire rod entries under HS chapter 7213 is fixed at 158,929t, while tonnage for pipe under HS chapters 7305 and 7306 is at 2.494t and 1,153t, respectively.
Measures are expected to come into force after their publication in the Official Gazette at the beginning of June. The Brazilian Chamber of Foreign Trade (Gecex) is evaluating expanding duties on four other steel fractions, such as tubes and pipes.
“The measures are very important for the sector, but they do not completely solve our problems since they will be valid for up to one year,” comments local steelmakers association Instituto Aço Brasil (IAB) board member and Gerdau chief executive Gustavo Werneck.
Source:Kallanish
