By Brazil Stock Guide – Brazil’s steel industry is pulling back on investments as rising Chinese imports and new US tariffs reshape global trade dynamics. Companies including Gerdau (GGBR4.SA), Usiminas (USIM5.SA) and Companhia Siderúrgica Nacional – CSN (CSNA3.SA) are warning of job cuts and reduced capital expenditures amid what executives describe as “unfair competition.” The information was first reported by Valor Econômico.
A key turning point came after US President Donald Trump announced a 50% tariff on steel imports, a measure that hits Brazilian exports and forces producers to redirect shipments into an already oversupplied domestic market. “The penetration of foreign steel into Brazil has reached unacceptable levels,” said Gerdau CEO Gustavo Werneck, adding that the company has already cut 1,500 jobs this year.
Gerdau
While Gerdau continues to expand in the US, reducing idle capacity and lifting profits, the company has been scaling back operations in Brazil. Werneck said the current quota and tariff system has proven ineffective, with more layoffs likely if conditions persist.
Usiminas
Usiminas (USIM5.SA) revised down its 2025 investment plan to between 1.2 billion and 1.4 billion reais, from a previous range of 1.4 billion to 1.6 billion reais. The company cited unfavorable market conditions beyond its control, underscoring the uncertainty surrounding future spending.
CSN and ArcelorMittal
CSN Chairman Benjamin Steinbruch urged the government to act against what he called “disorderly and exaggerated” imports. Meanwhile, ArcelorMittal (MT) stressed that China’s “unsustainable steel capacity” continues to weigh on global prices, undermining industry fundamentals outside Asia.
Wider Impact
Industry data show imports surged 39% in June to 596,000 tons, while domestic output stagnated at 2.84 million tons, according to Instituto Aço Brasil. The federal government has extended steel import quotas until May 2026 and launched its largest-ever antidumping probe into 25 Chinese steel products.
Regional groups are also sounding alarms. Haroldo Filho, president of Rio de Janeiro’s steel processors’ association Aproaço, warned that up to 30% of the state’s steel workforce could lose jobs by year-end. “If the government doesn’t want to upset China, then it must at least provide relief for the industry,” he said.
Financing and Survival
Aço Verde Brasil, led by CEO Silvia Nascimento, raised 300 million reais in debentures to preserve liquidity for the next 18 months. “The average steel price fell in June, stabilized in July, and rose slightly in August,” she said. “Still, the year-to-date trend remains downward, mainly due to Chinese imports.”
Analysts including Artur Bontempo of consultancy Wood Mackenzie argue that while trade barriers may slow import flows, long-term visibility is needed to justify capital-intensive investments. With high interest rates, a slowing economy and elections approaching in 2026, steelmakers remain cautious about committing new resources in Brazil.
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