US import HDG tonnages from Brazil remain limited

Sources close to SteelOrbis have confirmed that Brazilian steelmakers continue to have a preference to serve local markets due to reduced steel production rates within that country.

In reducing exports, they can increase domestic sales, the source notes, adding that since demand within that country continues to outpace supply, price points within that market are “quite attractive.”

In terms of current ex-Brazil futures prices to the US, one company has increased their Galvalume pricing to $864/mt FOB.  The current price reflects an 8 percent increase from the mill’s previous offer.

Sources within the US say that current strength within US HDG prices has some concerned about booking offshore, due to the rate at which US HDG prices increased.  Market sources are split on their temperament with regard to US flat rolled steel prices.  Although many believe that prices could hold strength due to the current, decreased availability of imports due to the recently-finalized trade case, others feel that current US prices are “too high and that it’s only a matter of time before the bubble pops.”

Thus, buyers’ desire to book offshore is limited by a marked reluctance to take delivery before January 2017 due to year-end inventory taxes, along with concerns that US prices will soften by the time they are able to take possession of offshore steel arrivals.