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| Brazil Steel Slab |
US Tariffs Slash Brazil’s Slab Production and Imports
Brazil’s steel industry experienced a notable decline in August, as crude steel production fell 4.6% year-on-year to 2.86 million tonnes, largely due to a sharp 21% drop in slab output. The US’s recent doubling of steel import tariffs, effective June 4, significantly disrupted Brazil’s slab supply chain, as the US was the country’s main slab supplier.
Shift in Trade Flows and Domestic Market Contraction
In response, Brazilian steelmakers redirected slab exports to other Latin American markets, raising exports to nearly 688,000 tonnes in August. However, domestic rolled steel production also decreased by 5.5%, falling to 1.98 million tonnes. Meanwhile, domestic sales of rolled steel dropped to 1.8 million tonnes. Steel imports fell sharply by 24%, accounting for 16% of the market, down from 20% the previous year.
Market Outlook and Strategic Adjustments
The US tariffs continue to pressure Brazil’s steel industry, forcing producers to adjust supply chains and export strategies. While exports have grown modestly, domestic demand and imports remain subdued. The overall impact signals tighter market conditions and highlights the geopolitical influence on global steel flows, which Brazil must navigate carefully to sustain growth.
ScrapInsight Commentary
Brazil’s steel sector faces structural challenges from US tariff policies that restrict slab imports. The shift in slab exports and imports may reshape regional steel trade patterns. Future market stability depends on tariff negotiations and Brazil’s ability to diversify slab sourcing.
