The Brazilian producers of Galvalume, CSN and ArcelorMittal, are facing difficulties to implement an estimated 6 percent price increase for the product in the domestic market, an industry source told SteelOrbis.
In December, the product was sold at BRL 2,400/mt ($854/mt), CFR, no taxes but PIS Cofins levies included, but the new price of BRL 2,544/mt ($905/mt), to compensate for the inflation of 2014, was not fully accepted by the market and sales went down so far in the year.
The source ascribed the downturn to the sluggish performance of the local economy for most of its sectors, chiefly in the housing and car industries.
The local production of Galvalume is not sufficient to meet the domestic demand, so Brazil is a net importer of Galvalume and similar products, having imported 327,000 mt in 2014, 73 percent more than in 2013, at an average FOB price of $794/mt.
In January, Brazil imported 21,000 mt of the product, 70 percent more than in December, at an average price of $775/mt FOB.
The supply of Galvalume and similar products to Brazil is dominated by China, shipping almost 100 percent of the volume.
The Brazilian exports of the product are irrelevant, around 10,000 mt in 2014.
1 US$ = BRL 2.83