Brazil's prices for imported hot rolled coil (HRC) have increased this week as new tariffs on imported products took effect and mixed signals emerged from China's steel sector.
Import prices for Chinese origin HRC into Brazil were around $545 per metric tonne (t) cfr, up from the $470-494/t cfr range in the previous week. This sharp uptick followed Brazil's decision to increase tariffs on imported products after domestic producers claimed unfair competition, mainly from China, was hurting their operations.
The new tariffs, which took effect in June, started impacting consumers in August. Another reason cited for the price increase in Brazil was a possible price floor reached by Chinese mills in recent weeks. These producers have expressed concerns about their financial health amid a slow economic recovery that led to multi-year HRC price lows in China earlier this month.
China sought outlets for its steel outside the country, lifting exports of steel and iron products by 23% to 55.2 million tonnes year-to-date July 2024 from the same period in 2023, according to customs data. At this rate, China's yearly exports in 2024 will be the highest since 2016.
It is uncertain whether the price increase will begin to weigh on demand as buyers balance greater availability of imported steel against claims that many prefer domestically-sourced HRC.
