A major scrap exporter in Sao Paulo told SteelOrbis that he is exporting the HMS-1 grade product to Bangladesh at $200/mt, CFR conditions, comparable with $220/mt one month ago.
He added that logistic costs for shipments to the Asian country are now BRL280/mt ($71/mt), resulting in FOB conditions of $129/mt, in his view a price level leading to very low profitability.
In the Brazilian domestic market the HMS-1 grade product is now sold at BRL450/mt ($113/mt), FOB, no taxes included, against BRL500/mt one month ago.
The source mentioned that so far in the year the volume of scrap traded by the company went down on yearly basis by 40 percent.
In his view, the country’s scrap market is in a downward trend, derived from the poor industrial activity, generating less scrap, in vicious cycle ultimately affecting the demand for scrap.
In August, Brazil exported 48,800 mt of carbon steel scrap, chiefly to Asian countries, at an average FOB price of $188/mt.
1 US$ = BRL 3.95 (September 30)