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BRAZILIAN SCRAP FIRMS SEEK TO BLOCK EXPORT TAXES.

Issued at 2012-11-09



Representatives of the Brazilain scrap metal industry have begun discussions with government representatives to block an export tax proposal raised by the Brazilian Steel Institute (IABr), an organization comprised of domestic steelmakers.

"The rate may allow steel mills to control costs by limiting the pricing power of scrap producers," André de Almeida, director of legal and institutional affairs for the National Institute of Iron and Steel Scrap Business (Inesfa) told Platts Steel Business Briefing.

He said 10 million metric tons of scrap produced in Brazil are sold at a discount of 33% compared to international prices. Currently, scrap dealers only export 0.2% of annual production.

“The largest steel groups want the government to create this tax because they do not to want pay a fair price for the scrap that they are consuming,” stated Almeida. He believes the tax is absurd because Brazil is also trying to decrease finished steel imports that undermine Brazilian mill production.

IABr CEO Marco Polo de Melo Lopes said that the motivation for the tariff is to impose a barrier against countries that block Brazilian finished steel exports. "It is not an action against the local scrap industry," he said.

The dispute comes amid weak steel market conditions. There is still no decision on what will be done.


Source: SBB



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