Rumors that Brazilian steelmaker Usiminas could increase heavy plate prices in the coming weeks have gained strength among local distributors, which are now seeing room for a hike, as other producers, such as Gerdau, have also announced readjustments for other types of steel.
“We’ve been hearing that heavy plate prices could increase in the first half of October,” a Sao Paulo-based distributor told SteelOrbis, adding the hike could reach up to 17 percent.
“Usiminas always increase heavy plate prices at least twice a year. We already had a readjustment this year, so it’s possible they could rise prices soon,” a second source said.
As of September 28, sources told SteelOrbis there was no official announcement from Usiminas about increases in heavy plate prices, despite a recent report from newspaper Valor saying so. Since the BRL is devaluated compared to the USD, and considering the fact that Usiminas buys most of its raw materials – iron ore and coal – in USD, the hike is likely to happen, according to Valor.
Sources said it’s hard to determine if all price hikes will, in fact, be sustained, as inventories continue high, and there’s no lack of supply.
“A few weeks ago, Gerdau said WFB prices were readjusted in 17 percent. We passed the price increase to our clients, but now we’ve seen the same product being sold at lower quotes,” a distributor, which also sells heavy plates from Usiminas, said.
According to this source, with the recent price increases announced by Gerdau on all its long steel products, WFB was being sold at BRL 3,080/mt, ex-works, no taxes included. However, prices have changed, as Gerdau said the readjustments would be take place gradually.
“In one week, we sold WFB from Gerdau at BRL 3,080/mt, ex-works, no taxes included, now we’re selling the same product in the same conditions at BRL 2,550/mt”, a distributor in the state of Sao Paulo told SteelOrbis.
“We expect a hike near, 8 percent, which is in line to the recent readjustments we’ve seen in the past few years,” this source said.
A third source in the state of Espirito Santo said it is selling A36 heavy plates from Usiminas at BRL 2,700/mt, full taxes. Last week, a distributor in the state of Sao Paulo said it was selling A36 heavy plates from Usiminas with a thickness between 37.5-76mm at BRL 2,600/mt, ex-works, no taxes included.
1 US$ = BRL 4.11 (September 28)