Gerdau warns of crisis risks for Brazil’s steel industry

The industry is affected by rising imports and underutilized capacity

Without decisive action to support the steel industry, Brazil risks losing its domestic steel production, which could have negative consequences for the entire industrial supply chain. This warning was issued by André Bir Gerdau Johannpeter, co-vice president of the Gerdau steel group, according to Reportacero.

He noted that geopolitical conflicts, tariffs, and significant steel imports into the country are likely to make this year the most difficult for the country’s steel sector.

Johannpeter pointed out that the share of imported steel in the domestic market is currently 22-25%, whereas previously this figure was 10%. Most of these imports come from China.

In addition, the Brazilian steel industry is currently operating at 35% of its capacity. More than a third of furnaces and equipment are closed or operating at reduced capacity due to a lack of orders. Johannpeter believes that this puts the metallurgical sector in a rather unstable position.

It should be recalled that in May this year, the Brazilian government reinstated the protective measures on steel imports adopted in 2024. A 25% tariff was maintained on 19 types of metal products, and its scope was expanded to include four more (for a total of 23). The inclusion of additional items is due to a significant increase in their imports over the past year. The measures will remain in effect for 12 months.

The quota system for certain import volumes that can be imported into the country at initial NCM (classification system) rates of 9% to 16% has been retained. However, supplies made under trade agreements or special regimes have been excluded from the calculation.