Rio de Janeiro – Brazilian raw steel production grew 24% in the first half of this year, compared to the same period last year, reaching 18.1 million tonnes. Domestic sales (12.09 million tonnes) rose 43.9%, and apparent consumption (14.03 million tonnes), 48.9%. The data were released today (22) by the chief executive of the Brazil Steel Institute (IABr), Marco Polo de Mello Lopes.
However, the balance reveals that exports had a retraction in volume (-13.7%), with a total of 5.2 million tonnes, and a 28.3% increase in value (USD 3.8 billion) in comparison to the same period of 2020. Lopes stated that steel consumption and economic development “go together and are inseparable” and that the product is an early indicator and could influence the growth of the Gross Domestic Product (GDP, total amount of goods and services produced in the country).
Imports surged 140.6% in volume in the cumulative amount from January to June, totaling 2.5 million tonnes, with a 105.6% boost in value, USD 2.3 billion in the assessed period. Lopes highlighted that, in the first half, compared to the annual averages of 2018, 2019, and 2020, domestic sales improved 28.9%, 28.7%, and 24.4%, respectively, while exports dropped, in the same comparison, 61%, 54.4%, and 33.7%. According to Lopes, this proves the argument that the sector has exponentially increased exports does not correspond to reality.
For him, the Import Tax rate should not be reduced in the face of threats to Brazil in the steel sector “because of the brutal excess of installed capacity worldwide, which last year reached 562 million tonnes.” In his view, this opens up opportunities for “predatory conduct, protectionist escalations, and degraded prices.”
Lopes stressed that, all over the world, countries have been adopting safeguards to protect themselves from these practices. According to him, South America, and Brazil, in particular, seem to be without any particular defense mechanism. With this, Brazil can become a “depository for trade diversion,” he added.
Translated by Elúsio Brasileiro
