Exports of hot rolled coils (HRC) from Brazilian producers totaled 88,000 mt in June, a sharp increase of 590 percent compared to tonnages recorded in May, according to the country’s ministry of development and foreign trade.
However the average HRC price for the month of June, $558/mt FOB, reflected a decline of 8 percent compared to May, mostly attributed to the approximately 42,000 mt exported to Asian countries at a price level of $525/mt FOB. Meanwhile, around 29,000 mt were shipped to the US at $582/mt FOB, and 17,000 mt were shipped to other regions in Latin America at $599/mt.
“If you want to export to Asia you need to reduce the FOB price to be competitive and compensate for freight costs,” a Rio de Janeiro-based trader told SteelOrbis.
When questioned about the fact that the price of the HRC exported to Asia in June was roughly the same as the average price of slabs exported during the same month, the source said that this should not be considered as a surprise, as the slabs currently exported by Brazil are of high quality grades, demanding high premium, including the IF grade (Interstitial Free) destined to the auto industry, while the HRC exported are usually of the basic commercial grades.
The top HRC exporters in June were ArcelorMittal Tubarao (51,000 mt) and Usiminas Cosipa (37,000 mt).