Brazil Minister 'Doesn't Rule Out' Axing Steel Import Tax
June 08 2010 - 6:24PM
Dow Jones News
Brazil's Trade and Industry Minister Miguel Jorge said Tuesday
he "doesn't rule out" the possibility of zeroing Brazilian steel
import tariffs in a move to dissuade the country's steelmakers from
pushing up product prices.
The government has been studying the measure for several weeks,
as a way to combat rising inflationary pressures in Brazil, but
hasn't yet reached a decision, a ministry spokesman cited Jorge as
telling reporters in Brasilia.
So far it hasn't been necessary to implement the measure, which
continues to be assessed, Jorge said.
Last week two Brazilian steelmakers, Companhia Siderurgica
Nacional (SID, CSNA3 BR), and the Tubarao mill of ArcelorMittal
(MT, MT.AE), notified customers of plans to increase steel prices
by as much as 10%.
The steel prices come in the wake of announcements that prices
for iron ore, the steelmakers' main raw material, will increase by
up to 35% on international markets.
Brazilian steel sold on the domestic market can reach prices as
much as 40% above international levels, according to key industry
analysts.
Steel imports into Brazil surged to 1.8 million metric tons in
January-April 2010, up 156% from the same 2009 period, due to cheap
international prices and the strengthening of the Brazilian real,
according to Brazil's Steel Institute, known as IABr.
Brazil's steel import tariffs stand at around 12% for flat
products which use iron ore as a main raw material.
At 5.3%, Brazilian consumer inflation is outstripping the
government's 4.5% target for 2010.
-By Diana Kinch, Dow Jones Newswires; 55-21-2586-6086;
diana.kinch@dowjones.com
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