Brazil May Cut Steel Duties to Curb Inflation, Mantega Says
By Andre Soliani
June 11 (Bloomberg)
Brazil may scrap duties on steel imports in a bid to contain inflation after wholesale prices rose the most in two years, Finance Minister Guido Mantega said.
“If an industry exaggerates when increasing prices, it knows what will happen -- we will lower the import tariff,” Mantega, 61, said in an interview at the Bloomberg office in Sao Paulo yesterday. “What concerns us the most is steel, because it has an impact on the economy as a whole.”
Inflation has been running above the government’s 4.5 percent target since January, as the fastest growth in 15 years raises concern that Latin America’s biggest economy may be overheating. Wholesale prices, as measured by the IPA index, jumped 2.06 percent last month, up from 0.68 percent in April, fueled by the cost of iron ore and steel.
Mantega didn’t provide details about the plans to cut the maximum 14 percent duty on steel imports. The final decision lies with the foreign trade chamber. Over the past year, the federal government commission has reduced tariffs on 16 products, including sardines, palm oil and beer cans, as local producers struggle to meet surging demand.
Steel mills are resisting efforts by iron-ore suppliers including Rio de Janeiro-based Vale SA to raise third-quarter contract prices after steel prices fell 10 percent from an 18-month high on April 15.
Vale, the world’s biggest supplier of iron ore, won a 90 percent price increase for April quarter contracts after it dropped a 40-year custom of setting annual prices.
Source: businessweek.com
By Andre Soliani
June 11 (Bloomberg)
Brazil may scrap duties on steel imports in a bid to contain inflation after wholesale prices rose the most in two years, Finance Minister Guido Mantega said.
“If an industry exaggerates when increasing prices, it knows what will happen -- we will lower the import tariff,” Mantega, 61, said in an interview at the Bloomberg office in Sao Paulo yesterday. “What concerns us the most is steel, because it has an impact on the economy as a whole.”
Inflation has been running above the government’s 4.5 percent target since January, as the fastest growth in 15 years raises concern that Latin America’s biggest economy may be overheating. Wholesale prices, as measured by the IPA index, jumped 2.06 percent last month, up from 0.68 percent in April, fueled by the cost of iron ore and steel.
Mantega didn’t provide details about the plans to cut the maximum 14 percent duty on steel imports. The final decision lies with the foreign trade chamber. Over the past year, the federal government commission has reduced tariffs on 16 products, including sardines, palm oil and beer cans, as local producers struggle to meet surging demand.
Steel mills are resisting efforts by iron-ore suppliers including Rio de Janeiro-based Vale SA to raise third-quarter contract prices after steel prices fell 10 percent from an 18-month high on April 15.
Vale, the world’s biggest supplier of iron ore, won a 90 percent price increase for April quarter contracts after it dropped a 40-year custom of setting annual prices.
Source: businessweek.com
