A source from a major steel producer told SteelOrbis that flat steel export prices are threatening profitability in Brazil.
“Prices are currently so low that apparently there is no way to decline more. Under such prices, no producer is having profits. We are all operating below marginal cost,” the source said when asked about the apparent stability of prices over the last weeks. Currently, export prices for slab are around $320/mt FOB, HRC prices are at $440/mt FOB, and CRC offers are about $560/mt FOB, all for the basic commercial grades.
The source mentioned that the situation in the domestic market is similar, with the price of heavy plates at the equivalent to $650/mt, ex-works, no taxes included.
A source from another steel producer confirmed the scenario, mentioning that the profitability of export operations derive entirely from the margins achieved by higher quality products, such as those destined to the auto, piping and shipbuilding sectors.