As steel prices in Brazil have risen between 8% and 12% in the domestic market recently due to a rise in iron ore prices in April, Volkswagen Brazil is importing steel from China and other auto makers are following suit. Auto industry insiders say it is getting harder to negotiate long-term contracts with local mills, especially over a year, and the industry is under increased pressure to control costs as the government removes tax breaks, requiring imports of low-priced steel to remain competitive. Market analysts believe that Brazilian steel mills are likely to adjust steel prices again at the end of the second quarter, so before that, steel imports are expected to increase.