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“We will monitor the prices of these products, because if there is an increase in the domestic market, there will be inflation, and we do not want this,” Brazil’s finance minister Guido Mantega said.
If domestic prices for any product on the list are increased, then the product risks being removed from the list, Mantega said, according to an official statement from the Brazilian development, industry and foreign trade ministry, MDIC.
The Brazilian Chamber of Foreign Trade (Camex) approved on Tuesday September 4 a lift up to 25% on the import tariff of 100 products from several sectors, including steel, aluminium and copper.
Steel products affected include hot rolled coil, heavy plate, wire rod, stainless steel sheet and coil, alloy bars, oriented grain (OG) silicon steel, pipes and drawn products.
In most cases, import duties will increase from 12% to 25%, according to the Camex list.
Mantega’s warning, however, should prevent domestic steelmakers from trying to implement local price increases, Barclays Capital analyst Leonardo Corrêa said in a report.
“The government was very clear that higher import tariffs will be tied to stable pricing in the domestic market, which should weigh against price adjustments by local mills in the next 6-12 months, in our view,” he said.
“In addition, the recent decline in raw material prices should limit the bargaining power to increase prices,” the analyst added.