Steelmakers announce plans to invest US$20bn in Brazil by 2028

Steelmakers have outlined plans to invest 100bn reais (US$19.6bn) in their operations in Brazil as companies in the sector try to fend off what they describe as unfair competition from Chinese firms. 

The investments will be made by various companies through 2028 and were announced by representatives of the sector during a meeting with federal government officials. 

The announcement comes just weeks after the Brazilian government hiked tariffs on imports of Chinese steel in response to demands from local steelmakers, with authorities creating import quotas for 11 steel products from China for a period of 12 months.

"There is unfair competition from Chinese products. What China is trying to do is export unemployment and there is little that can be done against that, even with the imposition of tariffs," Fernando Del Roy, director of marketing, supplies and market intelligence at Grupo Açotubo, one of the largest steel distributors in Brazil, told BNamericas.

"I believe that a solution will only happen when China, for its own domestic reasons, decides to end the practices that are causing excess steel production there," he added.  

In addition to steel, imports of other products produced in China, such as electric vehicles, have also undergone significant increases, impacting Brazil's trade balance.

After posting a record trade surplus of US$98.8bn last year, the surplus is expected to fall substantially this year. 

"This year the trade surplus is likely to be between US$80bn and US$85bn, not repeating last year's record, among others factors, as imports will gain strength, mainly due to an aggressive increase in products imported from China," José Augusto de Castro, president of the Brazilian foreign trade association (AEB), told BNamericas.