André Bier Gerdau Johannpeter, the co-Vice Chairman of Gerdau, warns that Brazil's idle steel capacity has already reached 35%. 

Since the ideal idle capacity rate is considered to be between 15% and 20%, Johannpeter believes that the index shows that the industry's existence is now at risk, mainly due to cheap imported steel from foreign providers as well as weakening demand in the local market. 

According to statistical data cited by Johannpeter, before the COVID-19 pandemic, Brazil used to import 2.2 million tons of steel, and the current number has soared to 6.3 million tons, leading to price drops, weaker domestic demand, and an inventory backlog.