For the second consecutive session in the Chinese spot market, the price of the 65 percent iron sinter feed fines of Brazil has reached a new record high, this time $244/mt, against $235/mt yesterday, CFR China conditions.
Reflecting the rebound of the global economy and fears of undersupply, the price uptrend is finding support in high prices along the whole steel production chain, from raw materials to rolled products.
Sources mentioned that such prices are about to reach a limit, when high costs associated to the utilization of steel products begin to affect the profitability of projects or products that are intensive in steel usage. In Brazil, there are reports of housing projects that have changed the building technology from steel beams to concrete structures, and the substitution of steel siding panels by conventional painting.
A steel trader in the northeast of Brazil told SteelOrbis that he has cancelled orders of HRC and CRC from domestic producers, based on the assumption that he would not be able to sell the products at a profitable margin.
Analysts believe that iron ore prices will continue to increase, until the steel prices begin to stabilize, which will occur when the volume of steel stocks reach normal levels at steel producers, distributors and consumers.