The Brazilian producers are negotiating wire rod of the mesh grade for export at $620/mt, FOB conditions, against $610/mt during the last five consecutive weeks, a local source told SteelOrbis.
According to the source, the increase reflects the shortage of material for export, rather than increased demand, as domestic producers are focused in the domestic market.
The source added that at least one of the domestic producers is using production in other associated companies in South America to meet previously assumed wire rod export deals.
A second local source mentioned that the Brazilian power tariffs have increased over the last weeks. This is forcing the steel producers to relocate production in the search of more competitive power tariffs. In Brazil, the production of long steel products is almost entirely based on the energy intensive consumer electric arc furnace (EAF) technology plants.
In May, ArcelorMittal exported 8,200mt of wire rod at $692/mt to the US, 1,000mt at $624/mt to South Korea, 300mt at $593/mt to Paraguay and 200mt at $590/mt to Argentina, while Gerdau exported 3,500mt to Argentina at $631/mt and 1,000mt to Thailand at $727/mt. Price deals were likely closed in March and include different product grades.