A source from a major distributor in Brazil’s southeastern region told SteelOrbis that the company plans to maintain wire rod prices stable, at least until the end of September.
The source added that the company reduced domestic prices in average by 8 percent one month ago, as an attempt to regain its market share, which declined after the competition reduced prices two months ago by more than 10 percent, in an attempt to increase sales in a scenario of lackluster demand.
“Our market share was partially recovered since then, but we decided not to reduce the prices again, at least until the end of September, when we believe that another evaluation could indicate the best way forward”, he said, adding that a price reduction at any cost could lead to a negative result.
Wire rod mesh is currently sold in the Brazilian domestic market at BRL2,889/mt ($832/mt), while the drawing grade product is sold at BRL3,230/mt ($931/mt), both CFR, full taxes conditions, a price stable in BRL in one month but reduced by three percent in $ terms over the period.
In July, Brazil exported mesh grade wire rod at $414/mt and the drawing grade at $472/mt, FOB average prices.
1 US$ = BRL 3.48 (August 17)