A source from a major scrap processor in Sao Paulo told SteelOrbis that he is selling the HMS-1 grade scrap in the domestic market at BRL 500/mt ($120/mt), FOB, no taxes conditions, against $450/mt in December, a price stable since September 2015.
He ascribes the price increase to the scarcity of the product, as the industrial activity that generates this scrap grade was severely affected by the poor performance of the country's economy.
He added that the competition from exports, coupled to the devaluation of the BRL, have also played a role in the improved price.
The source mentioned that he is selling such scrap grade to clients in Bangladesh and India at $185/mt, CFR conditions, also stable since September 2015, a price translated into $118/mt, FOB conditions, given logistics costs of BRL 280/mt ($67/mt) to ship the product to the Asian countries.
In December, Brazil exported 46,200 mt of carbon steel scrap at $152/mt, FOB conditions, compared to 39,500 mt at $153/mt FOB in November, according to the ministry of development, industry and foreign trade, MDIC. The main destinations were Asia (45,300 mt) and the EU (700 mt). The top destinations in Asia were Bangladesh (20,300 mt), India (16,500 mt) and Pakistan (7,300 mt), while smaller tonnages were shipped to Indonesia, Vietnam, Hong Kong and China.
During 2015, Brazil exported 618,500 mt of carbon steel scrap at an average price of $211/mt, against 591,200 mt at $301/mt in 2014, both FOB conditions.
1 USD = BRL 4.15