Import prices into the region remained stable at the beginning of the month, amid uncertainty about the effects of output reductions.

But South American import prices showed significant upswings late in November, with China-origin prices on the rise as a result of the output cuts in the Asian nation, initiated in the middle of the month.

The hot-rolled coil (HRC) market has been the most active among flat steel goods - “and it should continue this way [toward the end of the year],” a South America-focused steel trader said.

Metal Bulletin’s weekly price assessment for HRC imports into South America rose to $590-610 per tonne cfr on Friday November 24, from $575-585 per tonne cfr on November 3.

Last week’s price range was the highest level since mid-September, when HRC imports were assessed at $620-630 per tonne cfr.

The increase reflected not only high-priced offers from China, but also fresh Brazil-origin offers placed in neighboring South American countries.

“Brazilian mills are benefiting from increased Chinese prices, which have created room for them to raise prices,” a second source said.

“Brazilian steelmakers are competing for the Pacific coast market against Chinese materials,” another source said.

South America’s Pacific coast region includes Peru, Chile, Colombia and Ecuador.

Brazil
At the end of October, Brazilian mill Usiminas backed down from a planned increase in domestic flat steel prices due to lower prices from China during that month.

Now, the company expects local prices in the distribution sector to remain stable, chief executive officer Sergio Leite said on November 22.

But he recognized that should Chinese mills continue to increase their flat steel export offers, Brazilian companies could once again have an opportunity to positively adjust their prices.

“There were delegates [at the Latin American steel congress in early November] raising the possibility that HRC prices in China could reach as high as $700 per tonne [fob] due to output cuts,” Leite said. “But I do not believe this.”

Metal Bulletin’s fob China HRC Index was $553.81 per tonne on Wednesday November 29, down by $2.91 per tonne on a daily basis.