Heavy plates with more than 10mm in thickness are currently sold in the Brazilian domestic market, ex-works, no taxes included, at BRL2,038/mt ($650/mt), against BRL2,100/mt three weeks ago, which at that time was equivalent to $690/mt.
The competition from imports (21,800 mt arriving in February) and reduced domestic demand are putting pressure on the country’s sole producer Usiminas, which is reportedly searching for alternatives to increase exports, limited today to a few hundred tons per month.
The domestic demand reflects both a lackluster economy and the suspension of acquisitions linked to projects of the national oil company Petrobras, currently investigated on suspicions of corruption.
An industry source told SteelOrbis that the domestic prices for most steel products are approaching a level that will put producer margins at risk, adding that nonetheless such prices could further decrease over the next few months, as they ultimately depend on the price of the imported material.
“The producers establish their prices as a premium over the price of the imported material: if the price of the imported item goes down, the possibility of an increase of the domestic price is locked,” the source concluded.