Literally translated means “you shit”! It’s very particularly used in Rio de Janeiro and it doesn’t need to be used when you are really angry with any friend. It can actually be used any time between two closed (or almost) friends.
In the following example you can see one A person requesting the other one action about solve a problem and even using “Seu merda” as “his name”, he really doesn´t get offend about it.
A: Seu merda! Já te falei para resolver essa parada logo! B: Tranquilo… pode deixar comigo.