Brazil’s flat steel producers to increase May prices by 10-18%

Brazilian flat steel producers are poised to raise domestic prices by 10-18% in May, due to rising global steel and raw materials values, along with resilient local demand, market participants told Fastmarkets this week.

Companhia Siderúrgica Nacional (CSN), the country’s second-biggest flat steel producer, led the way when commercial executive director, Luis Martinez announced a 16-18% increase in a conference call on Thursday April 29.

CSN’s hot-rolled coil prices will rise by 16% and cold-rolled material by 18%, while Galvalume galvanized steel will increase by 16.5%, sources said.

Two traders and one distributor source said that Usiminas, ArcelorMittal and Gerdau would soon follow suit.

They said that Brazil’s largest flat steel producer, Usiminas, was about to announce a 10% increase for May, while ArcelorMittal (the third-ranked flat steel producer) was planning a 17% hike and Gerdau (in fourth place) would raise HRC prices by 15% and heavy plate prices by 12%.

Usiminas, ArcelorMittal and Gerdau all told Fastmarkets they would not comment on the matter.

Finished steel prices have climbed consistently since the beginning of July in 2020, when demand started to recover from downward pressure caused by Covid-19 and started to outpace supply increases.

Fastmarkets’ assessment for steel hot-rolled coil domestic, monthly, exw Brazil, was 6,133-6,224 Reais ($1,146-1,163) on April 9, up by 5.56% from 5,848-5,858 Reais per tonne on March 12 and by 133.55% from 2,636-2,655 Reais per tonne on June 12, 2020, just before the start of the uptrend.

Fastmarkets’ assessment for steel cold-rolled coil domestic, monthly, exw Brazil, was also higher at 6,865-7,323 Reais per tonne on April 9, rising by 6.39% from 6,654-6,682 Reais per tonne a month before and by 136.43% from 2,985-3,016 Reais per tonne on June 12, 2020.

Additionally, Fastmarkets’ assessment for steel hot-dipped galvanized coil domestic, monthly, exw Brazil, was 8,238-8,695 Reais per tonne on April 9, 16.63% higher than the previous month’s 7,195-7,323 Reais per tonne and up by 148.07% from 3,403-3,423 Reais per tonne on June 12, 2020.

The next Brazilian domestic price assessments will be published on May 14.

A few Brazil-based market participants expressed concern that growing imports and strong sales volumes from local mills would soon build excessive inventories, with end-user demand at risk due to the worsening Covid-19 outbreak in the country. That could block future price increases, they said.

CSN did not seem to concur, however.

“We’re watching the supply chain closely and, obviously, it gets more difficult to apply higher prices as you go downstream, but there’s no way out of this. It boils down to higher cost and stronger finished steel prices overseas,” Martinez said.

Galvalume® is a registered trademark of BIEC International.

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