Cold-rolled steel: Germany becomes Brazil's top export market

From irrelevance to the top in twelve months

In 2024, Germany was barely a footnote in Brazil's cold-rolled flat steel export data (SH4 7209). FOB recorded was US$143 — less than a local trucking invoice — representing a 0.0002% share of the total. Twelve months later, the country held #1, with US$27.3 million shipped and 25.3% of total segment exports. Thirty-four positions climbed in a single year.

The value jump is statistically rare: FOB variation represents an increase of roughly 191,000 times in nominal terms. This is not a methodology adjustment or a data artifact — it is a corridor that effectively did not exist, now accounting for a quarter of all exports in the segment.

A new entrant cracks a stable market

The angle here is a new entrant disrupting a consolidated market. SH4 7209 — cold-rolled carbon steel sheets and coils, a critical input for automotive, appliances, civil construction, and capital goods — is characterized by stable buyer bases and long-term contracts, making abrupt entries unusual.

Germany is one of Europe's largest steel producers and consumers. Its automotive sector (Volkswagen, BMW, Mercedes-Benz) and equipment manufacturers (Siemens, ThyssenKrupp) consume significant volumes of cold-rolled sheets. The shift from marginal purchases to US$27.3 million suggests a supply event opened space for Brazil: a reduction in local capacity, restrictions on a traditional supplier, or simply a favorable price window.

The 2025 European context is relevant: European steelmakers faced energy cost pressures and capacity constraints, particularly following the post-Russia/Ukraine gas disruption. Brazilian steelmakers such as CSN and ArcelorMittal Brasil, with structurally lower energy costs, are well-positioned to capture demand when it becomes available.

What 25.3% share means

Capturing 25.3% of total exports in the first year as a relevant destination is a positive anomaly. New destinations typically ramp gradually: 2%, 5%, perhaps 10% by the second or third year. Arriving at a quarter of total in the debut year indicates the shipments were not a test order — they were a supply contract at scale.

This also creates concentration risk: a single new buyer accounting for a quarter of total segment exports creates corridor dependency. If the contract does not renew in 2026 or volumes retreat to European norms, the number drops sharply — and the ranking reshuffles.

Why now?

The combination of a BRL-favorable FX rate in 2025 (real depreciated against the euro) with European demand for alternatives to domestic steelmaking creates an opportunity window that may not repeat at the same intensity. European buyers that tested the Brazilian supplier in 2025 now have a delivery track record they can scale.

The technical detail matters: cold-rolled SH4 7209 products carry tighter tolerance specifications than hot-rolled equivalents. A first meaningful contract with a German buyer functions as a de-facto certification — and tends to open doors to other European buyers.

Implications for you

For exporters:

• Formalize a 2026 supply agreement with the German buyer before the close of the European commercial year (typically Q4 2025 / Q1 2026) — the price and FX window may tighten, but the commercial relationship is already established.
• Map other German and Austrian buyers in automotive and capital goods that have not yet been approached — Germany's rise to the top-1 slot serves as a reference for regional prospecting.

For importers:

• Watch whether other European countries start seeking Brazilian steel as an alternative — if the corridor expands beyond Germany, Brazil's exportable surplus may become more contested and prices could rise.
• Explore spot contracts with Brazilian steelmakers while exportable capacity is not yet locked into long-term agreements.

The last time Brazil became the top-1 European destination for steel in a single year was during the post-2008 crisis demand wave. The 2025 curve looks the same. How it ends is a different question.