AFP reported that faced with dwindling demand from crisis hit rich countries, Brazilian steelmakers are pinning their hopes on moves by the government to protect the industry from cut rate Chinese imports.

Brazil, which ranks ninth among top steel producers, is facing tough competition from world leader China, whose exports are benefiting from the artificially low Yuan.

Brazilian Industry Minister Mr Fernando Pimentel said Brasilia might take measures to protect the country from imports, notably through a tax calculated on the basis of the devalued currency of the country of origin.

He said during a meeting of the Latin American Steel Association that "This defensive move could be coordinated with the International Monetary Fund or a group of international financial institutions."

According to the Acero Brazil Institute, Brazil produces 32.8 million tonnes of gross steel and 25.9 million tonnes of rolled products.

In 2010, the country imported a total of 5.9 million tonnes of steel products worth USD 5.5 billion, up by nearly 155% YoY. Imports are forecast to drop to 3.3 million tonnes in 2012, down by nearly 40% YoY.

According to Alacero, but despite this fall, steel imports in Brazil have grown 400% in volume over the past 9 years.

In 2010, Brazilian exports rose to 9 millions tonnes worth USD 5.8 billion, up by 4.1% in volume and 22.8% in value compared with 2009. The devaluation of the Brazilian currency helped bring down imports as the price of domestic steel drew closer to that foreign steel.

(Sourced from www.terradaily.com)