Why did Brazilian steel stocks fall

Shares dropped after the government extended the tariff system which steelmakers believe isnt strong enough to control imports

How does the tariff system work

Imports within quotas pay tariffs between 9 and 16 while amounts over those quotas are taxed at 25

Which companies were most affected

Stocks of CSN Usiminas and Gerdau saw the biggest declines

What does the steel industry want

They want stricter tariffs including a 25 rate on all imported steel

How do global trade issues affect Brazils steel market

Rising Chinese imports and global market shifts increase pressure on Brazilian steel producers

Brazil Steel Stocks Drop After Tariff System Extended

🔸Published: 29 May 2025 12:17 PM

🔸Updated: 10 Jun 2025 04:49 PM

Brazil renews steel import tariffs, but stocks of major steelmakers plunge as industry calls for stricter measures amid rising imports, especially from China.

Shares of major Brazilian steel companies fell sharply after the government announced it would extend its quota-based import tariff system for another year. This system, meant to protect the local steel industry, has drawn criticism from producers who say it doesn't do enough to limit imports—especially from China.

Details of the Tariff System

Under the renewed system, steel imports within set quotas are taxed between 9% and 16%. Imports above those quotas face a higher tariff of 25%. The policy covers 23 different steel products but excludes imports from countries that have special trade agreements with Brazil. This exclusion has also raised concerns in the industry.

Market Reaction

Following the announcement, shares of leading steelmakers saw notable declines:

CSN dropped 4.4%
Usiminas fell 3.6%
Gerdau slipped 1.2%

By comparison, Brazil’s main stock index, the Bovespa, only declined by 0.5% that day.

Industry Response

Steel producers expressed frustration, saying the current tariff system isn’t effective enough in limiting import volumes. Imports surged by 27.5% year-over-year in the first four months of 2025, reaching 2.2 million metric tons. Industry leaders are pushing for tougher rules, including applying the 25% tariff to all imported steel, similar to policies in the EU and U.S.

Global Trade Challenges

Brazil’s steel industry also faces rising competition from Chinese imports, which increased by 57.8% in the first quarter of 2025. Chinese steel now makes up 78% of Brazil’s flat steel imports, raising concerns about unfair competition and disruption in the local market.

Disclaimer

This article is an original summary based on publicly available information as of May 28, 2025. Procapitas is not affiliated with any official agency and recommends readers consult official sources for the latest updates.