Brazil steelmakers see lower output, layoffs as imports surge -September 27, 2023 at 01:02 pm EDT

SAO PAULO, Sept 27 (Reuters) – ArcelorMittal
expects to produce less steel than previously forecast in Brazil
this year, while peer Gerdau has hinted at potential
layoffs as steelmakers complained on Wednesday about a surge in
imports into the country.

The sector has urged Brazil’s government to impose a 25%
tariff on steel imports, citing similar measures in the European
Union and Mexico.

The head of ArcelorMittal’s Brazilian unit, Jefferson De
Paula, said at an event hosted by the Aco Brasil industry group
that the company’s estimated steel output in 2023 is now 1.3
million metric tons below previous expectations.

Companies claim cheaper steel from Russia and China has been
flooding Brazil’s market.

ArcelorMittal had aimed to produce 15 million to 16 million
tons of steel this year, but will fall short of that goal, De
Paula told the forum.

Gerdau Chief Executive Gustavo Werneck called on Brazil’s
government to decide on a tariff on steel imports, saying the
company was on the brink of laying off workers because of idle
capacity.

“We now have a plant in Ceara state that is fully idled,
plants from north to south of the country that are not
operating,” Werneck said. “People are sitting at their homes
waiting for a government decision.”

Some 600 Gerdau workers already had their contracts
temporarily suspended, he added, though he did not say how many
plants had been temporarily shuttered in total.

According to Aco Brasil, Brazil’s steel output dropped 8.9%
in the first half of 2023 when compared with the previous year.
It has continued to fall in July and August.

The group currently sees steel imports growing between 40%
and 42% this year, up from a July forecast of 25.6% growth. It
said it fears as many as 15,000 jobs could be lost in the
sector.
(Reporting by Alberto Alerigi Jr.; Writing by Gabriel Araujo;
Editing by David Gregorio)