Brazil Steel Quota Usage Inches Up Amid Slower Import Momentum

Brazilian Steel Quota Usage Sees Modest Increase

Brazil’s steel import quota usage edged up to nearly 264,000 metric tonnes (t) by July 30, according to the Foreign Trade Secretariat. This figure marks an increase of 4,000t compared to the previous week. The quota, which allows buyers to import up to 475,800t of select steel products under reduced tariffs, has reached over 55% utilization just two months into the current four-month cycle.

Tubes and coated steel showed marginal upticks in quota usage, while cold-rolled and hot-rolled steel remained stagnant. Under Brazil’s quota regime, introduced in June 2024, 17 steel products qualify for reduced import tariffs ranging between 9% and 13%. However, once individual product limits are met, importers face a steep 25% tariff on additional volumes.

The quota system, renewed through June 2026, aims to curb import surges that reached 5.9 million tonnes in 2024 — a record-breaking figure. Despite initial urgency from buyers earlier in the quota period, the pace of quota utilization has since slowed considerably as importers become more cautious in their purchasing strategies.

Importers Face Strategic Choices as Tariff Pressure Builds

The current import environment demands calculated decisions from steel buyers. With quotas resetting every four months, many buyers front-loaded shipments early in the cycle. As a result, July’s slower fulfillment trend suggests that importers are now assessing remaining margins and tariff implications more closely.

Brazil’s decision to expand the quota scope and lower tariff-eligible volumes in 2025 adds another layer of complexity. The policy’s tightening grip, while designed to shield domestic producers like Gerdau, Usiminas, and CSN, also reflects concerns about global oversupply and pricing volatility — particularly in China and Southeast Asia.

Meanwhile, buyers are now balancing quota availability with logistical timing, especially ahead of the next reset in October. This makes accurate forecasting and flexible sourcing essential for downstream sectors, including construction, automotive, and infrastructure development.

SuperMetalPrice Commentary:

Brazil’s steel quota strategy is entering a critical phase. While initial quota cycles saw rapid uptake, the current slowdown signals a more measured approach by importers. This reflects growing caution amid tightening rules, rising costs, and international competition. Looking ahead, market participants should expect heightened volatility in both quota utilization rates and domestic pricing. Monitoring regional flows and anticipating regulatory shifts will be vital for maintaining supply chain resilience into 2026.