A market source in Brazil told SteelOrbis that the last export slab deals to the US were closed at $555/mt, against $540/mt last week, FOB conditions for the basic commercial grades.
The source added that exports to other destinations are being closed in a range $500/mt to $510/mt, against a flat $500/mt last week, under the same conditions.
According to the source, the increased price reflects increased domestic demand, as local producers Gerdau and CSN have idled blast furnaces for maintenance, giving rise to additional demand for slab to supply their rolling activities, which are currently supplied by Pecem and Ternium.
Gerdau and CSN are secondary players in the Brazilian slab export market, so sources say their temporary absence will not have a great impact on the supply side. However, their additional demand for slab is expected to increase prices of the product in the short term.
Another factor with a potential to increase steel prices is the lack of definition on future iron ore prices, currently affected by the reduced production of the local miner Vale, due to an accident with a waste dam in January.
Vale announced recently that the shortfall is in the range of 50 million mt to 75 million mt, against a previously planned production of 400 million mt in 2019. According to analysts, such a reduction has a potential to increase iron ore prices by 10 percent from their current levels.
Preliminary figures by the Brazilian customs authorities point to a significant increase in March from the 343,000 mt of slab exported in February.
