(Bloomberg) -- Brazil continued to see a significant increase in steel imports two months after stepping up protections for its mills amid a flood of cheap imports led by China.
The nation bought 38.3% more alloy abroad in July compared to the previous month, according to industry association Aco Brasil. Steel imports reached 3.3 million tons in the first seven months of 2024, a 23.7% jump. The increase comes on the back of last year’s record high, when shipments reached 5 million tons. China accounted for more than half of this volume.
Latin America has been grappling with an uptick of cheap imports due to prohibitive tariffs elsewhere. At the turn of the century, China was sending just 80,500 tons of steel a year to the region. Last year, that figure approached 10 million tons.
In June, Brazil introduced a tariff-rate quota system to stop predatory pricing of imported alloy. A reversal of the negative scenario in the second half of the year is still a show-me story as the higher tariff is limited to 11 types of products and only charged on shipments exceeding quotas.
Still, Aco Brasil estimates it is possible to see imports of these products — which account for 40% of total imports — decrease by more than a quarter this year if quotas are enforced without fraud. The share of China’s ports decreased in July, which could be a good sign.
“Our concern is that the protection system is effective. We set up a war room to monitor and it seems to be working so far,” Marco Polo de Mello Lopes, the head of Aco Brasil,said in an interview. “But we need a little more time to find out if the quota has been properly scaled.”
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