Metal Bulletin’s weekly price assessment for cold rolled coil (CRC) imports into the region dropped to $590-595 per tonne cfr on Friday March 24 from $625-640 per tonne cfr on March 3.
This was the first time that CRC prices had been assessed below the $600 per tonne cfr mark since early December last year, when prices reached $595-610 per tonne cfr.
Meanwhile, Metal Bulletin’s weekly price assessment for hot rolled coil (HRC) imports in South America declined to $520-530 per tonne cfr on March 24 from $540-550 per tonne cfr on March 3, while prices for hot dipped galvanized coil (HDG) decreased to $645-660 per tonne cfr.
The decline in South American flat steel import prices was mostly due to a slowdown in China’s local market, which has affected Chinese export values.
But market participants did not expect this trend to continue.
“Output cuts in China are real, and prices may stabilise or even rise again before June,” a regional steel trader said.
A second source concurred, saying that the fall in prices seen in the past couple of weeks was not “dramatic”, and that clarity on price direction was expected in the coming weeks.
Brazil’s domestic gross product (GDP) contracted by 3.60% year-on-year in 2016, after falling by 3.80% in 2015, according to figures released by national statistics agency IBGE at the beginning of March.
This was the worst recession period in the country since 1930-31.
Agribusiness GDP was down by 6.60% in 2016 on an annual basis, while industrial GDP declined by 3.80% and service sector GDP dropped by 2.70%, IBGE data showed.
But the country’s industrial output increased by 1.40% year-on-year in January, representing the first period of growth after 34 consecutive months of declines in year-on-year comparisons, IBGE said in mid-March.
The first indications of a recovery in the Brazilian economy have been reported, although flat steel demand in Brazil continues to be considered weak.
Brazilian flat steel sales, for instance, decreased by 11.30% year-on-year in February, as recent domestic price increases have reduced local buying interest.
In February, local flat steel prices in Brazil were up by an average of 8%, following an adjustment announced in January due to higher coking coal and iron ore costs, as well as an uptrend in prices in the global market.
Meanwhile, Brazilian domestic flat steel prices were unchanged month-on-month in March.
Import prices for flat steel products in South America fell in the second fortnight of March, bringing to an end nearly two months of gains. This downward trend is not expected to be maintained in the coming months, however.