LATIN AMERICA FLAT STEEL WRAP: Price upswings, HRC trade case affects Brazilian market

The year of 2017 ended with rumors that Brazilian companies would raise their flat steel prices to the local market, and these rumors began to be confirmed in the first days of trading activity in 2018.

On January 10, CSN was the first to publicly announce a price increase of 12% in its flat steel prices to the domestic distribution chain. It blamed higher input costs and rising steel prices in the global market, mostly in China.

The adjustment was valid for hot-rolled coil (HRC), cold-rolled coil (CRC) and hot-dipped galvanized coil (HDG).

Usually, a company takes a lead in price adjustment moves and is followed by its competitors. This is what has happened this month.

On January 16, Usiminas said that it would increase its flat steel prices for the local distribution chain by 13%, with effect from January 29.

Later in the month, Brazil’s flat steel association, Inda, confirmed that ArcelorMittal and Gerdau had also passed on increases of 12% and 12.50%, respectively, on flat steel goods in January.

The domestic prices of flat steel products in Brazil will closely follow international prices, the association said at the time.

Metal Bulletin’s China export HRC index was $577.75 per tonne fob on January 30, up from $571.88 per tonne fob on December 29.

On January 5, Metal Bulletin’s monthly domestic price assessment for Brazilian HRC was 2,300-2,400 Reais ($728-760) per tonne ex-works, without local taxes. The new market prices for Brazilian flat steel goods, taking into account the January adjustments, will be reflected in Metal Bulletin’s next monthly price assessments on February 9.

Trade case
Besides the price increases, the main subject of discussion in the Brazilian flat steel market in January was the long-waited trade case involving HRC imports from China and Russia, which was initiated in July 2016.

National foreign trade chamber Camex has set 5-year anti-dumping duties on HRC imports from China and Russia, varying within the range of $44.08-226.58 per tonne, effective from January 19, 2018.

But Camex also suspended the measure for one year due to “public interest.”

The decision by the Brazilian government to suspend anti-dumping duties against HRC imports from China and Russia was motivated not only by fears that the measure would injure the consuming sectors, but also by concerns that it would affect cooperation between the countries.

The Camex decision says that measures will be suspended “for a period of as long as one year, which may be postponed by an equal period of time.”

The ambiguous nature of this decision is also making Brazilian market participants confused.

Some of them still do not “feel safe” to resume imports of HRC from either country, while others believe that the situation may create import windows which will raise the pressures on local producers.

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