A source from a major slab producer told SteelOrbis that the base FOB price for the negotiation of the product for export is $250/mt, for the basic commercial grades.
Such price compares to $260/mt two weeks ago, following a consistent downward trend since $530/mt on July 2014, with a short period of stability at $320/mt between April and June 2015.
According to a local analyst, such price is not compatible with a profitable operation and is considered as the main factor behind the decision by the flats producer Usiminas to idle the steel production at its Ipatinga plant from January 2016, maintaining only hot and cold rolling operations.
“Usiminas does not count on Ternium to foster export sales, as the Italian-Argentine group, the main shareholder of Usiminas, is in a dispute with the Japanese shareholders of the company, while Tubarao and CSA count on the support of ArcelorMittal and ThyssenKrupp, respectively, and Gerdau Acominas has the support of the international chain of the Gerdau group to export its slab,” the source said, adding that CSN, the other Brazilian slab producer, does not export slab as a basic market decision.
In September, ArcelorMittal Tubarao exported 312,800 mt of slabs at $304/mt, ThyssenKrupp CSA 205,300 mt at $292/mt, Gerdau Acominas 112,000 mt at $274/mt and Usiminas 90,100 mt at $276/mt, all FOB conditions.