Brazil’s Coated Steel Import Quota Approaches Limit

Brazil’s coated steel import quota has reached 79% of its 293,200 metric tons allocation by October 8, according to the Foreign Trade Secretariat (Secex). This surge in demand comes just before the quota cycle ends on October 23. Industry players worry about the impact on local markets if the limit is reached.

Quota System and Rising Demand

Brazil introduced a quota system in June 2024 to control rising steel imports and regulate the market. The policy allows for 497,130 tons of coated steel to enter the country under lower tariffs. Once the limit is reached, tariffs will increase from 10% to 25%. This change will make imported steel more expensive and could disrupt local steel consumption.

In the first week of October, imports surged to nearly 21,000 tons, a significant jump from the weekly average of 5,000 tons between June and October. Importers are racing to secure products before the higher tariffs take effect. Galvanized and galvalume steel are in high demand, particularly for civil construction projects.

Impact on Brazil’s Steel Imports and Domestic Supply

The rapid pace of imports highlights the increasing demand for coated steel products. Brazil’s government introduced the quota system to limit growing steel imports and protect local producers. Despite these efforts, the country is on track to break its import record in 2025, with projected rolled steel imports of 6.3 million tons—an increase of 32% from 2024, according to Instituto Aço Brasil.

This surge in imports suggests a growing reliance on foreign steel, even amid tariff increases. Smaller buyers have already exhausted their import licenses, and larger buyers are likely to dominate the market. The extension of the quota system through May 2026 indicates Brazil’s ongoing efforts to manage its steel market but also points to challenges for local producers and importers alike.

SuperMetalPrice Commentary:

As Brazil’s coated steel import quota nears its limit, the market tightens. Increased demand and looming tariff hikes place pressure on both importers and consumers. While the government’s measures aim to protect local steel producers, they could raise costs for sectors like construction and manufacturing. The continued rise in steel imports indicates a shift in market dynamics. Companies involved in the trade must adapt to these changes by adjusting supply chain strategies and preparing for potential price increases.