Before this month’s upswing, the latest price rise implemented by Brazilian mills – of around 8% –was in January this year.
Since then, local flat steel makers have been granting occasional discounts for inventory-origin materials, as well as for purchases involving large volumes, but list prices have remained unchanged.
Weak demand levels were behind the discounts.
Usiminas was the first company to announce a 10.70% increase in hot rolled coil (HRC) prices for the domestic market, a move followed by both ArcelorMittal and Gerdau, which also raised prices by 10%.
The adjustment reflected the rebound in HRC prices in the international market, as a result of increasing demand for flat steel products globally, according to Usiminas.
In addition, market participants said that Usiminas’s decision to raise HRC prices was an attempt to return the hot rolling mill at its Cubatão works, in São Paulo state, to profitability, thus increasing the company’s margins.
Although rising HRC prices in the international market, mostly in China, have indeed created the room for such an upswing, the July adjustment could also have been driven by the imminent conclusion of a trade case in Brazil, according to local sources.
An anti-dumping probe involving HRC imports from China and Russia is expected to be concluded by the end of this month, with duties being applied to products imported from both countries.
The rising HRC prices globally have also affected the import market in South America.
Metal Bulletin’s weekly price assessment for HRC imports into the region, including Brazil, surged to $530-540 per tonne cfr on Friday July 21, from $490-500 per tonne cfr on June 30.
This is the highest price level since the end of March.
The price growth was mostly due to high-priced offers from China.
Meanwhile, a Brazilian steelmaker has been reported as selling HRC volumes to other South American countries to fight for the regional market, making the competition with Chinese products fiercer.
Import prices for not only HRC, but other flat steel goods such as cold rolled coil (CRC) and hot dipped galvanized coil (HDG), are expected to continue to rise in the coming weeks, as the arguments for the present price rises will not change after the end of July, Metal Bulletin has learnt.
As a result, Metal Bulletin’s weekly price assessment for flat steel imports into South America are predicted to rise on July 28 for the seventh time in a row.
Export prices for flat steel products out of Latin America have also increased this month.
Recent export offers of HRC from Brazil were reported at $540 per tonne cfr to other South American countries, or around $500-505 per tonne fob, in line with higher Chinese offers.
In late June, HRC export prices were reported as high as $455-465 per tonne fob.
Also, Metal Bulletin’s weekly price assessment for Latin America-origin CRC exports rose to $540-545 per tonne fob on July 21, from $525-530 per tonne fob on July 7, as a result of higher offers and deals heard in Europe.
The month of July started with news of higher flat steel prices in the Brazilian domestic market.