Companhia Siderurgica Nacional’s HDG sales to benefit from appreciated US dollar

Tuesday, 17 March 2015 23:03:37 (GMT+3)   |   Sao Paulo
       

Brazilian steelmaker Companhia Siderurgica Nacional (CSN), which plans to double steel sales at its US facility from 300,000 to 600,000 mt, could benefit from the appreciation of US dollar over the Brazilian real (BRL) in the short term, a source, who used to work at CSN, told SteelOrbis.

 “It’s an opportunity. It could open an exports window for the next two, four or six months. Prices for HDG within the international market, which is driven by Chinese exports, are currently weak, so the US could be a good bet”, the Sao Paulo-based source said.

The source said Chinese mills are selling HDG at FOB $650/mt and raised concerns about whether the manufacturing of HDG in Brazil for sale in the US market could be a good option.

“When you sell too much finished products you’re facing the risk of being subject to anti-dumping measures”, the source said, adding it needed to sell “limited volumes of steel” to the US when working at CSN in order to not “call the attention” of US regulators.

The source estimated HDG prices to reach about FOB BRL 2,900-3000/mt within Brazil’s domestic market, which could compare to the $950/mt target price CSN currently suggest for the sale of the product in the US.

“You could sell HDG at the price you could sell in Brazil, but remember that you have freight costs to add”, the Sao Paulo-based source said. “You have good prices for HDG in the US, but you have to be careful with volumes”.


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