Steel Products

Brazil's Section 232 Slab Quota Resets Higher
Written by Michael Cowden
January 5, 2021
Brazil’s annual Section 232 slab quota has reset, a move that is likely to at least partially relieve a supply squeeze that has sent U.S. sheet prices to their highest point in more than 12 years.
Brazil’s Section 232 slab quota for 2021 is approximately 3.86 million tons, according to information from U.S. Customs and Border Protection (CBP), part of the Department for Homeland Security.
The annual quota is divvied up into quarterly limits. And Brazil’s first-quarter quota limit is roughly 1.16 million tons, per CBP data.
That’s significant because it is nearly a 20-fold increase from the 66,139-ton fourth-quarter limit set by the Trump administration. That low figure came after an initial fourth quarter quota of 385,809 tons was substantially reduced, according to an August press release from the office of the U.S. Trade Representative.
The quota reduction was put in place following a summer in which steel U.S. hot-rolled coil prices fell to around $20/cwt ($400 per ton)–or briefly below hot-rolled coil prices in China. U.S. prices have roughly doubled since and are now above $50/cwt for the first time since the fall of 2008.
The additional slab supply should come as a relief to slab re-rollers such as California Steel Industries (CSI), JSW Steel USA, NLMK USA and AMNS Calvert.
U.S. mills have come to rely heavily on Brazilian slab because it is cheaper than semi-finished products from other countries. That’s because Brazil is subject to a quota rather than the 25% Section 232 tariff that other major slab-exporting nations, notably Russia, must pay.
By Michael Cowden, michael@steelmarketupdate.com

Michael Cowden
Read more from Michael CowdenLatest in Steel Products

SMU Week in Review: September 1-5
Here are highlights of what’s happened this past week and a few upcoming things to keep an eye on.

HR Futures: Market finds footing on supply-side mechanics
As Labor Day marks the transition into fall, the steel market enters September with a similar sense of change. Supply-side fundamentals are beginning to show signs of restraint: imports are limited, outages loom, and production is capped, setting the stage for a market that feels steady on the surface but still unsettled underneath.

Beige Book: US markets remain cautious amidst volatile pricing environment
Sluggish economic activity across the US was largely attributed to uncertainty caused by tariff policies and growing cost pressures, according to the US Federal Reserve’s (The Fed) latest Beige Book report. The Fed’s latest economic report, posted on Sept. 3, consists of economic findings from the six weeks preceding Aug. 25 throughout 12 districts. Economic […]

Rig count dips again in both US and Canada
Oil and gas drilling activity waned in the US and Canada this past week. Ticking own for the second straight week in both regions.

Steel caucus pushes US trade officials to maintain strong S232 program
The bipartisan Congressional Steel Caucus is pushing for US officials to maintain a robust Section 232 program as they negotiate trade deals with America's trading partners.