Brazil’s steelmakers are running their furnaces on low heat. Data from Instituto Aço Brasil for August show an uncomfortable drop in apparent demand: flat steel slid 10% from a year earlier, while longs fell 14%. Production, domestic sales and exports followed the same discouraging rhythm.
Imports also shrank — down 11% in flats and 40% in longs — creating the illusion of relief. But the core problem lies elsewhere: domestic consumption is melting away. Even in decline, imported steel still accounts for 22% of flat demand and 11% of longs.
For Usiminas, CSN and Gerdau, this is a banquet of bad news. High interest rates are suffocating construction and manufacturing. A 17% jump in long exports in August looks less like a trend and more like opportunistic selling. If domestic demand keeps collapsing, pricing power will vanish — and margins will go up in smoke.
The U.S. has slammed the door shut with its new tariffs. China, meanwhile, keeps flooding markets. Its export machine is still running at full speed: the trade surplus, which nearly hit $1 trillion last year, has already reached $785.8 billion by August. Those excess tons are knocking on open doors — and Brazil is on the front line.
Steelmakers here face a demand problem that won’t be solved by fewer imports. The risk is turning into a luxury scrap yard: storage for what the U.S. won’t take and China insists on pushing in.
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