Brazil's foreign trade committee Gecex plans to roughly maintain a 25pc tariff-quota system on 23 imported steel products for 12 more months, starting in June.
The decision increases the number of tariffed products from the version implemented a year ago, but the new quota volumes have been slightly reduced, now calculated without imports from bilateral agreements or special regimes.
All 23 steel products will remain subject to an import tax of 9-16pc, with a 25pc tariff applying if the quota is exceeded.
Market participants expect steel prices in Brazil to increase within a month following the implementation of the renewed quota system.
Mills have struggled to raise hot-rolled steel prices as import competition intensified. Argus-assessed domestic HRC prices fell back to December levels after mills failed to sustain their January price increases.
Brazil introduced the tariff-quota system in May 2024, initially covering 11 steel products.
Eight additional items were added over the year, amounting to 19 products with import restrictions.
Officials added four more products in the latest meeting on Wednesday, suspecting they were used to bypass tariffs. Some importers have turned to boron-added steel to avoid quotas and higher tariffs.
These four new products were included because of a sharp rise in imports last year, suggesting they had become substitutes for previously tariffed items, according to the ministry of development, industry, commerce and services.
Steel demand has held steady despite interest rates hitting their highest levels in nearly 20 years.
Brazilian steelmakers have been calling for stricter trade defense measures as steel imports rose by 21pc in April from a year earlier despite the tariff-quota system.
Some mills representatives have proposed abolishing quotas and imposing a 25pc or higher duty on all steel imports. But the government opted for a more moderate approach, weighting the potential inflationary impact of such charges.
"The establishment of quotas aims to mitigate the impact on sectors that use steel in their production chain, such as civil construction, automobiles, capital goods and electronics," the ministry said.
The 25pc tariff applies to items whose external purchase volume surpassed the 2020–2022 average by 30pc, excluding imports under bilateral agreements or special regimes.
Import prices have risen slightly over the past three weeks, but the Brazilian real's appreciation to the US dollar has kept import prices at a discount over domestic prices.
Beyond tariffs, rising freight costs are further pressuring overall steel prices in Brazil, sources said.
In addition to tariff quotas, Brazil found evidence of Chinese steel dumping in three other products. It decided not to impose temporary sanctions in any of the cases until the anti-dumping investigation was fully concluded.
