Brazilian domestic demand for structural heavy plates is weak, sources told SteelOrbis, adding that prices are slightly declining but should remain stable until the end of the year.
“Market demand is very weak and we have an exceeding supply of the product,” said a Sao Paulo-based distributor.
According to sources, distributors are selling ASTM-A36 (2008) structural heavy plates in Brazilian end-use markets at BRL 2,900/mt (US$1,278) FOB price, excluding taxes.
Brazil’s Usiminas, which is the sole producer of heavy plates, is selling the product at the BRL 2,500/mt ($1,101) FOB price to local distributors.
“Prices are not expected to rise. We can reduce our prices up to 5 percent, but we’re not expecting any hike on heavy plates prices,” a source said.
A second source said Usiminas, which sells ASTM-A36 (2008) structural heavy plate, readjusted the product’s price by 8 percent this year. “We depend on state-run companies, which are, in most cases, our end-users. As we’re close to October elections, demand tend to decrease,” one source said, adding that the World Cup also contributed to a weaker demand.
Earlier this week, a Brazilian distributor association said sales of flat steel were expected to slow down this year.
Currently, mills are struggling with smaller orders and distributors are fearing that weak demand for plates and slabs could lead to more unwanted inventory, unless activity improves.
$1 = BRL 2.27