Wire rod exports by Brazilian producers reached 16,000 mt in June, reflecting a 14 percent increase from May. FOB average prices were 3 percent lower, at $639/mt, according to the country’s ministry of development, industry and foreign trade.
However, sources tell SteelOrbis that such prices do not reflect market conditions and are probably related to sales by the local producers to their subsidiaries and associated companies abroad.
According to trader sources, wire rod prices of the mesh grade must be offered at less than $590/mt to succeed in finding clients abroad.
Further, some Brazilian producers of long products are reportedly warning steel traders that they will return to the export markets, making available regular tonnages for export via traders, a practice suspended over the last few years.
One trader attributed a sharp decline in the domestic demand, reflecting the lackluster performance of the local economy, as the main reason behind the decision to increase exports.
Brazil was a net exporter of rolled steel products until 2009, running into deficit since 2010, reflecting a combination of factors leading to the loss of competitiveness of the local steel production.