Brazil government investment in steel industry

On Monday, May 20, steel sector representatives announced at Planalto Palace an investment of BRL 100 billion over the next five years to expand production capacity in Brazil. The announcement, made in the presence of President Luiz Inácio Lula da Silva and Vice President and Minister for Development, Industry, Commerce and Services Geraldo Alckmin, followed a series of government measures aimed at strengthening and increasing the competitiveness of the national steel industry. These measures include recent import quotas for 11 steel products and an import tax of 10.8% to 14.4% intra-quota and 25% extra-quota, designed to protect the domestic industry from global oversupply. Alckmin emphasized the importance of these investments for enhancing competitiveness, decarbonization, and job creation, while President Lula highlighted Brazil's growing attractiveness for investments related to climate and energy transition.

BNDES President Aloizio Mercadante noted the government's role in reversing deindustrialization, emphasizing the state's partnership and financial support for the productive sector. The steel sector's announcement comes in response to measures addressing the surge in Chinese steel imports due to global protectionist trends, which have led to increased Brazilian import tariffs. In 2023, Brazil produced 31.9 million tons of crude steel and saw a 57.1% increase in steel imports, while local production dropped by 6.5%. The government's intensified trade defense measures, including ongoing anti-dumping investigations against several countries, further support the domestic industry amid global challenges.