Analyst: Govt. unlikely to reduce steel tariffs

The Brazilian government is unlikely to reduce tariffs on steel imports and if so the effect would be minimal, Cristiane Vianna, a steel analyst from Portuguese bank BES Securities, told BNamericas. On December 24, local papers reported that a study from the finance ministry proposed the removal of import tariffs of 12-16% on 20 steel products. "It is a negative piece of news but I don't think it will be put into effect," the analyst said. Federal foreign trade policy body Camex will decide on January 12 if the proposal will be put into effect. On January 6, government officials will discuss the idea with members of the steel community. The goverment study came after steel consumers complained of new price hikes to the metal in the 10-16% range starting in January. Vianna forecast that even with zero tariffs Brazilian mills would not be affected. "The cost of producing in Brazil is very low, international prices are high and freight costs are up," said the analyst, adding that port and transport costs having to be paid by users also act as deterrents to importing. Government pressure to zero tariffs is unlikely to stop mills from upping prices. "The effect would not reduce high international prices and the price of iron ore and coal along with other costs have increased," she said.