Brazil’s slab export prices rise but market braces for US tariffs
Export prices for Brazil-origin steel slab rose this week while market participants were estimating the consequences of the 25% tariff imposed by the United States following its Section 232 investigation into national security issues on steel imports.
Metal Bulletin’s weekly assessment of Brazil slab export prices was $560-570 per tonne fob on Friday March 9, up from $540-545 per tonne fob a week earlier.
“We expect that prices will continue to rise next week,” one source said.
“Producers are very optimistic,” another market participant added.
No offers were heard from Brazilian companies this week, but past deals were reported at $570 per tonne fob. There were several mentions of offers to be launched at $570-580 per tonne fob “next week”, sources said, but some participants were skeptical about this price level.
Sources believed that the viability of the new offers will depend on how the markets for flat steel in Europe and China will behave.
On the day after the announcement of the new tariffs against steel imports in the US, slab producers in Brazil were said to be “astonished” by the decision.
US President Donald Trump on Thursday signed off blanket tariffs of 25% on steel imports and 10% on aluminium imports. The duties will come into effect within 15 days of the formal announcement.
Market participants are now mostly waiting to see a clear trend emerge in the next week.
“There is too much speculation about what will happen,” a source said.
“[Producers] are still astonished by the decision [of the US government],” another market participant said.
“We will see days of speculation and volatility. [Some producers in Brazil] might have to find a new destination for their slab shipments,” a third market participant said.
“The market will get messy,” a fourth source said.
People close to the Brazilian slab market also hope for possible exemptions or changes in the US decision. Trump said on Thursday that the US is open to negotiations to modify or drop the tariffs for individual exporters.
“Countries are already moving to negotiate an exclusion from the tariffs,” a market participant said.
And another added: “The whole steel market will see a radical change.”