Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Brazil is being pressured by the US to change its current quota system to reduce steel exports to the North American country, according to Marco Polo de Mello Lopes, executive president of the Brazilian Steel Association (Iabr).


If Brazil does not reduce its steel exports to the US, the latter could apply a reduction on its quotas or impose a duty on exports, Lopes told some media outlets. 


South American steelmakers can ship up to 3.5mn mt of steel per year to the US under the quota system, according to media reports. However, on December 2, 2019, President Donald Trump announced the US would reinstate 10pc aluminum and 25pc steel tariff on Brazil, which has resulted in complicating the relationship between the two countries on the import and export of these materials.


Brazil is the third-largest exporter of steel to the US, comprising about 12pc of US steel imports. The South American country’s steel shipments to the US increased by 52.5pc to 21,067mt in June this year, from 13,807mt shipped during the same month last year, while alloy steel exports to the US jumped by 660.5pc to 2,875mt in June, from 378mt last year.


H1 steel output

Iabr also released Brazil’s steel production data on Tuesday, which indicated that crude steel production fell by 17.9pc to 14.2mn mt in H1 2020, from 17.3mn mt in H1 2019. Rolled steel production declined by 13.7pc to 9.99mn mt in H1 2020, from 11.5mn mt in H1 2019, while flat steel output dropped by 15.3pc to 5.7mn mt, from 6.8mn mt in the same period.


Brazil steel production and sales

ProductsH1 2020    %H1 2019
Crude steel output14.2mn mt-17.9pc17.3mn mt
Rolled steel output9.99mn mt-13.7pc11.5mn mt
Flat steel output5.7mn mt-15.3pc6.8mn mt
Long steel output4.2mn mt-11.4pc4.7mn mt
Steel consumption9.3mn mt-10.5pc10.4mn mt
Domestic sales8.3mn mt-10.5pc9.2mn mt 
Exports1.6mn mt +30.5pc1.2mn mt
Imports1.09mn mt-14.7pc1.2mn mt

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