SAO PAULO - Cheaper steel from Russia and China is “flooding” Brazil’s market, the chairman of Brazil’s Aco industry group said on Tuesday, calling for higher taxation on steel imports.
Mr Jefferson de Paula, who also heads the Brazilian arm of No. 2 global steelmaker ArcelorMittal, said during an industry event that “Chinese and Russian companies are flooding the market with steel products at subsidised prices.”
Meanwhile, the country’s steel mills have an idle capacity of around 40 per cent, he said.
Brazil’s steel imports this year through August jumped 49.5 per cent compared with the same period a year earlier, according to the industry group’s latest data, hitting 3.18 million tonnes.
At 61 per cent, the bulk comes from China.
“This is an emergency that is falling on a sector that invests and cannot continue to be vulnerable,” the industry group’s chief executive officer, Mr Marco Polo de Mello Lopes, told journalists.
Last week, the government announced that it will bring forward to Oct1 the end of a temporary tax reduction on 12 steel products, which was established last year and originally scheduled to end on Dec 31.
The measure, however, “is no longer sufficient” and is currently “innocuous,” said Mr Lopes, calling for the creation of a temporary 25 per cent tax on steel imports.
“I don’t see China as being as serious a problem as it was 10 years ago,” ArcelorMittal CEO Aditya Mittal said, while attending the conference virtually, noting countries should nevertheless “ensure fair trade.”
A series of trade actions against China as well as its focus on controlling its emissions should curtail the growth of its steel production capacity, he added, saying the Chinese government “is not necessarily supporting exports” of steel.
Global steel demand should, according to ArcelorMittal, reach 2.5 billion tonnes by 2050 from 1.9 billion currently. REUTERS
