A source from a major distributor in Brazil told SteelOrbis that wire rod prices will increase in the domestic market by 12 percent in average, effective for sales closed April 1, 2015 onwards.
With the new prices, the mesh grade product will be sold at BRL3,140 ($963/mt) and the drawing grade will be sold at BRL3,511/mt ($1,076/mt), both CFR full taxes.
Wire rod prices had already increased by 7 percent earlier this year, reportedly to compensate for the inflation in 2014.
According to the source, the domestic price is based on the competition from the imported product, which has increased in BRL terms due to the devaluation of the local currency in relation to the $.
“It makes no sense to keep prices low if sales will not increase due to the lackluster performance of the economy, the source said, adding that the new price is not expected to significantly affect sales in volume.
In February, Brazil exported 10,800 mt of wire rod at an average FOB price of $633/mt, almost entirely of the mesh grade, while importing 3,800 mt at an average price $684/mt FOB; the mesh grade product at $501/mt FOB and the drawing grade at $734/mt FOB.