Brazil's foreign trade authority, SECEX, has announced new import quotas for steel products totaling 529,113 metric tons, effective from October 1, 2024, to January 31, 2025. These quotas replace the previous regulations that were in place until September 30, 2024. The decision comes in response to increasing concerns over steel imports at allegedly dumped prices, particularly from China, which have been affecting the competitiveness of local producers.
The new quotas are categorized by product family. The allocations are as follows: plates in coil will have a limit of 7,964 metric tons; hot rolled coils are set at 54,030 metric tons; cold rolled coils will be allowed at 100,559 metric tons; zinc-coated steel has a quota of 156,709 metric tons; galvalume will be capped at 155,892 metric tons; wire rod is limited to 52,976 metric tons; and seamed piping is restricted to 983 metric tons. These specific allocations reflect the Brazilian government’s strategic approach to managing the types of steel most needed in the domestic market.
Interestingly, in just the first two weeks of October, importers have already utilized 63% of the quotas. This rapid consumption indicates strong demand for these products but also foreshadows a potential slowdown in imports in the coming months. Once these quotas are exhausted, any further imports will incur a significantly higher import tax of 25%, a substantial increase from the current average of 12%. This shift aims to make imported steel less competitive compared to locally produced options.
The introduction of these quotas and the accompanying tax increase are part of Brazil’s broader strategy to safeguard its domestic steel industry. Local producers have long expressed concerns over unfair competition from foreign steel manufacturers, particularly those who sell at lower prices due to various subsidies or lower production costs. By implementing stricter import regulations, the Brazilian government seeks to bolster its local industry and ensure that domestic manufacturers can compete effectively.
