Brazilian flat steel makers seeking 10% price hike for March orders

New York — Brazilian flat steel producers announced a 10% price increase for March spot orders, on top of the 10% adjustment already announced for January purchases, sources said.

Questioned about the new price lists for January, a market participant revealed mills had plans for another increase. "(Companies) already announced another 10% hike for March," he said.

The premium for domestic flat products over imports delivered to Brazilian ports, after custom clearance, is currently at negative or discounted levels, which provides room for mills to increase prices and improve margins.

According to S&P Global Platts' calculations, Brazilian hot-rolled coil is currently at a discount of 8.2% to a Chinese HRC delivered price at Brazilian port, after customs clearance, of $628/mt.

A distributor confirmed the new price increase attempt. "We have already heard about a 10% hike in March from at least two different mills," said the source.

Market sources have also confirmed some absorption of the January hikes, currently hovering at about 5%.

Platts assessed Brazilian domestic HRC last Friday at Real 2,410/mt ($576/mt) ex-works, taxes excluded, based on a range of Real 2,390-2,430/mt.

In 2019, Brazilian domestic HRC prices fell about 13% due to sluggish demand and strong domestic competition – driving prices back to 2017 levels.