Expert: Local steelmakers not capitalizing on Chinese demand

Chinese steel imports in 2009 are expected to be 20% higher than the year before but with very little coming from Brazil, according to Rodrigo Maciel, the executive secretary of the Brazil-China Business Council. "China's economy will rebound in the second quarter and increase steel consumption," Maciel said at a meeting in Rio de Janeiro on Monday. "In the last three years, due to the explosion in the economy, China went from being a net exporter to a net importer. In 2009, China will be a major net importer of steel and aluminum." However, Brazilian steelmakers so far have not shown signs they are capitalizing on the opportunities in China, Maciel said. Brazil's Usiminas (Bovespa: USIM5), which used to sell to China, has not had any orders since the end of last year, he said. Maciel added that he felt Brazil's steel industry currently seems to be more worried about Chinese steel coming to South America than exporting its products to the Asian country. The executive said a few years ago Brazilian steelmaker Gerdau (NYSE: GGB) tried to acquire a long steel facility in China but backed off due to alleged hindrances by the Chinese government. "The steel sector in China is somewhat closed to companies coming from abroad and it's hard to get approval from the government," Maciel said. "Tata Steel made an attempt and was vetoed by the Chinese. Luxembourg-based ArcelorMittal, the world's largest steelmaker, also made an attempt."