Brazil\u2019s steel industry is closing out 2025 under pressure from a surge in imports, with margins under pressure, operational shutdowns, reduced investment, and layoffs. The sector enters 2026 awaiting measures capable of reversing a situation that has dragged on for years.<\/p>\n
Data from the Brazilian Steel Institute (Instituto A\u00e7o Brasil) show that between 2021 and 2022, imports of flat steel products fell from 4 million tonnes (Mt) to 3.1 Mt. Since then, however, the trend has reversed. In 2025, volumes are expected to reach 5.7 Mt\u2014the highest level since 2010 (5.8 Mt)\u2014a 20.5% increase from 2024 (4.8 Mt).<\/p>\n
From January to November 2025, Brazil imported 5.4 Mt of flat steel, a year-on-year increase of 20.2%. As a result of this scenario, steelmakers canceled R$2.5 billion in investments in the Brazilian market, laid off 5,100 workers, and shut down four blast furnaces, one steel mill, and five semi-integrated plants (mini mills).<\/p>\n
In addition, the quarterly EBITDA of member companies fell 51.7% in the third quarter of this year compared with the fourth quarter of the previous fiscal year. Over the same comparison, the EBITDA margin declined by 7.7 percentage points.<\/p>\n
According to Lucas Sharau, economist and partner at iHUB Investimentos, among the companies most affected by imports are Usinas Sider\u00fargicas de Minas Gerais (Usiminas) and Companhia Sider\u00fargica Nacional (CSN), because flat rolled steel predominates in imports. Gerdau, meanwhile, is relatively less affected, as it has less exposure to this segment and a greater focus on long steel products.<\/p>\n
Triggers for a Turnaround<\/strong><\/p>\n In 2024, the federal government implemented a quota-tariff mechanism aimed at containing steel imports. The system, renewed in 2025 with the inclusion of more products, helped mitigate the issue but was not enough to solve the sector\u2019s problems, as Brazil\u2019s trade agreements with other countries and regions, special customs regimes, and state-level tax incentives continue to facilitate imports.<\/p>\n In ongoing dialogue with federal authorities, the Brazilian Steel Institute believes the country will impose new trade defense measures in 2026. In this context, Pedro Galdi, an investment analyst at the AGF platform, reiterates expectations that around mid-February, higher import tariffs will be approved for certain types of steel\u2014especially Chinese products\u2014which would be crucial to give the industry some breathing room.<\/p>\n According to Galdi, there are also rumors that China may tighten controls on exports of surplus steel, which would help reduce pressure on the sector. However, he notes that this is a problematic issue to change, as China is the world\u2019s largest steel producer and is unlikely to experience strong economic growth in the short term\u2014something that could otherwise ease the situation.<\/p>\n For Galdi, a turnaround in Brazil\u2019s steel industry will depend on higher import tariffs, an improvement in the domestic economy, and the continuation of U.S. tariff policies, which intensify market competition and trade diversion.<\/p>\n When listing potential recovery triggers, Sharau also highlights an expansion in domestic demand and the adoption of more effective trade defense measures. He adds that a reduction in interest rates\u2014lowering the cost of capital and unlocking investments\u2014and a weakening of the real against the dollar would also help narrow the price gap between domestic and imported steel.<\/p>\n Recovery Would Be Gradual<\/strong><\/p>\n If these positive factors materialize, Brazil\u2019s steel industry is likely to resume hiring and investment cycles. However, this recovery would occur in stages.<\/p>\n \u201cFirst, capacity reactivation is expected. Then, smaller projects. And later, larger capex,\u201d explains the iHUB Investimentos partner. According to Sharau, without the aforementioned triggers\u2014or until there is greater predictability around these variables\u2014the sector will remain defensive for longer, with investments on hold.<\/p>\n In this context, the AGF analyst notes that Gerdau has long warned about the risks of maintaining a hostile environment driven by imported steel. He adds that an investment strategy does not change overnight, which is why the company decided to reduce investments in Brazil, close plants, and lay off workers.<\/p>\n Galdi reinforces that other players, such as Usiminas and CSN, are adjusting investments with a focus on cost reduction. According to him, a shift in strategy is unlikely unless it is confirmed that the demand lost to imports can be recovered. \u201cIt is worth noting that imported steel already accounts for about 25% of the steel consumed in the country,\u201d he emphasizes.<\/p>\n