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“China will find a way to keep operating. Brazil is strategic for China, it’s a major partner. China will not want to hand Brazil over to the US,” a trader from a Chinese steel company told Fastmarkets.
So far, anti-dumping duties have been approved for pre-painted steel from China and India, for cold-rolled coil from China and for coated steel from China. The duties range between $284.98 per tonne and $709.63 per tonne.
As Brazilian participants expected, the situation has become more complicated for Chinese exporters, but, according to Chinese sources, it’s not impossible. These sources attribute this resilience to China’s productive culture.
“For example, Chinese exporters viewed the preliminary positive anti-dumping determination on wire rod from China and Russia as positive, because it recommended continuing the investigation, not implementing temporary anti-dumping measures and extending the deadline for the final determination of the case to within 18 months,” a Chinese source said. “This is good news for them.”
But what is good news for Chinese exporters is also positive for Brazilian mills, which viewed the same preliminary decision as a sign that the anti-dumping measure will ultimately be approved. For Chinese suppliers, it means more time to ship material before high tariffs make trade unfeasible. For Brazilian mills, it means that imports they describe as “unfair competition” will soon be removed from the market.
“The Chinese mindset changes very quickly, much faster than the Brazilian one,” the trader said. “They will try to find ways to bypass [anti-dumping measures].”
One of these strategies, according to reports repeatedly heard by Fastmarkets, is for Chinese mills to relocate production to other countries by setting up units outside China, using equipment that is now obsolete domestically and transferring production lines abroad.
“This is a movement that is happening, but you can’t build a steel mill overnight — it’s a long process,” the trader said. “And in the end, labor costs and other expenses tend to be higher. When you calculate total production costs, that has a major impact on the decision [to produce or not in other countries].”
There are reports from Brazilian distributors who have been approached by representatives of Chinese mills seeking to establish operations in other Latin American countries in order to avoid disrupting steel supply to Brazil and the region in general.
Another way to circumvent anti-dumping barriers would be to change the type of steel being exported.
“If there is no way to export semi-finished steel, Chinese mills will export finished steel instead, for example,” the trader added. “That gives them some time before Brazilian players request a dumping investigation, which will take at least another year and a half to conclude. In the meantime, they can continue exporting to Brazil.”
According to market participants working with Chinese steel, one of the main motivations behind such high dumping margins is the growing number of reports of Chinese steel allegedly entering Brazil as mislabeled material.
“That was a huge shot in the foot. Second-tier mills, which are suffering from declining demand, need to sell at any cost. They accept this, label the product with the wrong coating and sell it. That became ammunition. That is why the dumping margins came out so high. We were expecting $300-400 per tonne, and suddenly they were much higher,” the trader said.
The trader source added that the requests came from Brazilian customers who were aware of the practice and asked for falsification in order to maximize profits.
“[Chinese mills] needed to sell and complied with the requests. We don’t work like that, so in some negotiations, we offered material and received feedback that competitors’ prices were far lower because they were selling mislabeled products, and we knew that was the reason,” the trader said. “Chinese players sent several lawyers to follow the consultations related to the anti-dumping cases, but the outcome was not what they expected. This means the total unviability of importing the taxed products for at least five years.”
According to World Steel Association (worldsteel) data, in 2025 China’s output contracted, but it still accounted for 53% of total global output. Total crude steel production slipped by 4.4% from 2024 to 960.8 million tonnes, underlining the scale of demand weakness in its domestic market. Also, major importers of Chinese steel, such as Vietnam and India, have reduced purchases as their own capacity expands.
“Domestic market weak, foreign markets closed. From our global experience, even as a Chinese group, we will work with other origins. We have offices in 17 countries across Southeast Asia, and we see that they’re already working with higher prices for Brazil,” the trader source from a Chinese steel company said.
Given the size of the anti-dumping duties already approved, steel trade between China and Brazil is becoming increasingly unlikely.
“There were already expectations for these dumping margins since last year. We were waiting for the duty level, and it came out extremely high. If you look at today’s cold-rolled coil price in China, it’s almost the same level as the anti-dumping duty, which is like doubling the price, and complicates the viability of Chinese material in Brazil,” the trader said.
Fastmarkets’ weekly price assessment for steel cold-rolled coil export, fob China main port, was $540-551 per tonne on Tuesday March 3, up by $2-6 per tonne from $538-545 per tonne on February 24.
But Chinese participants believe Brazil will continue to rely on imports, even if from other origins, which would imply a more expensive supply.
“Of course, in an economic recovery, Brazil currently doesn’t have the capacity to meet all domestic demand, especially for coated and pre-painted products,” the trader said. “[Brazilian mills] are already delaying deliveries. Imagine when demand grows.”
A Brazilian domestic distributor reported to Fastmarkets in mid-February that they purchased around 1,000 tonnes of hot-rolled coil from a large mill but received only 250 tonnes on time. In this case, sources blamed mills’ preference for producing slab, which is commanding high prices, leaving HRC production in the background.
Dumping of HRC imported from China is under investigation and is expected by Brazilian market participants to be concluded by mid-2026.
Representatives of Brazil’s domestic market, however, say they’re not against imports, “only against dumping imports, which forces domestic mills to compete under unfair conditions,” a Brazilian distributor representative told Fastmarkets on February 24, after celebrating the newly approved anti-dumping duties.“Our reading is that there was strong lobbying from steelmakers, especially in an election year, when steel companies tend to finance many candidates,” the trader source from a Chinese company said. “I met with ArcelorMittal’s flat steel division, and we see that they’re quite optimistic, as is the domestic market, under this new scenario.”
The source expects domestic steel prices to show a solid 10% increase now, after several attempts at price rises were partially frustrated by strong import competition.
“I see this as a very significant upside for domestic mills,” they added.
Nevertheless, the trader doesn’t believe this will translate into investment while imports lose strength. From the Chinese perspective, Brazilian mills see it merely as an opportunity to “improve their profitability.”
The trader source from a Chinese steel company also doesn’t rule out the possibility that China will find ways to export taxed material despite the barriers.
“Maybe, with heavy government subsidies, China can lower prices enough to make buyers reconsider purchasing Chinese material,” they said. “You never know. It’s better to earn less than to completely halt business.”
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