The potential temporary increase in Brazilian import tariffs on certain steel products would have a small effect on industry pricing power, UBS analyst Andreas Bokkenheuser has said.
Domestic flat and long steel consumption in Brazil remains under pressure in light of the weaknesses in automotive demand and construction activity, among others.
"This limits steelmakers' ability to pass on higher prices to end-customers, even if cheaper steel imports are constrained by tariffs," Bokkenheuser said in a report published on Monday December 7.
Even if import tariffs were raised, import prices would be likely to remain under pressure, reflecting the continuous pressure on industrial capacity utilisation, which in China has declined to 75%, according to UBS.
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