Brazilian steelmakers are already facing difficulties due to the ongoing Russian invasion of Ukraine, a media report by Estadao’s Broadcast said.
Steelmakers, including flat producer Usiminas, typically buy steel products in the spot market for quick delivery, however they are reportedly struggling to purchase steel products. Usiminas buys mainly slab from third-party producers to meet part of Brazilian demand for the product.
About 100,000 mt of slab that Usiminas buys each month from third-party suppliers come from Russia, a source told Broadcast. Usiminas buys slab to supply its Cubatao mill located in the city of same name in Sao Paulo state. Usiminas said recently it has mainly purchased slab from local suppliers, including Ternium Brazil and Vale’s Companhia Siderurgica do Pecem (CSP).
After Russia was excluded from the international payment system SWIFT, buyers getting products from Russia or paying Russian suppliers are already experiencing troubles.
“It will be even more difficult to do business with the Russians” said Carlos Loureiro, president at Brazilian steel distributors association, INDA.
“Besides the lack of banks needed to intermediate transactions, there could be logistics issues, such as the lack of ships to delivery slabs,” Loureiro said.