China’s slowdown and global steel glut sound alarm bells in Usiminas | Businesses

THE Factories reinforced this Thursday (11) its alert about the impact of the slowdown of the Chinese economy and the global excess of offer of steel about the Brazilian market. At the company’s annual public meeting, the vice president of finance, Thiago Rodriguessaid China’s changing growth rate, around 5%, is at the center of the problem. imbalance which affects the steel mills all over the world.

Rodrigues emphasized that the autumn of the request The Chinese generated a significant volume of surplus production.

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“There are 500 million tonnes produced in surplus that will not be absorbed internally. (…) Additionally, Chinese demand for steel is declining, which means this surplus is being sent to other regions,” the executive said.

For Usiminas, the main problem is not only the excess volume, but the fact that part of this steel is exported at prices below the cost price, a practice that directly affects the competitiveness of local producers.

Trade protection measures

According to Rodrigues, this movement provoked a global reaction. “Countries around the world have used trade defense measures to protect themselves. » He cited prices, quotas And anti-dumping investigations as increasingly common instruments in the face of pressure from Chinese exports.

The company’s concern is reflected in recent decisions by the Brazilian government. The country renewed until 2026 the import quotas of steel, maintaining the additional duty of 25% for volumes exceeding established limits. At the same time, the Development Ministry opened an anti-dumping investigation into 25 Chinese products, responding to demands for more protection from steelmakers like Usiminas.

These measures, according to industry sources, could help reduce competitive pressure in the short term, although they will not solve the structural problem of excess global supply.. The advancement of trade barriershowever, requires caution from the Brazilian government. China is Brazil’s main trading partner, while UNITED STATES — who criticize the Chinese industrial model — support prices high prices for Brazilian steel, restricting an important market for domestic producers.