Brazilian mills, motivated by the currency exchange rate, are signaling an imminent price hike on flat steel products for October spot purchases, despite the depressed demand scenario that persists, market sources said Wednesday.
According to one executive, steelmakers are targeting prices increases for hot- and cold-rolled products, as well as for hot dip galvanized, of between 5% to 10%.
The move, he said, "is connected to the negative premium of the domestic products over the imported material," and motivated by the weakness of the Brazilian Real compared to the US dollar, which hit a record low Tuesday of Real 4.05/$1.
Sources said mills are not following the typical practice of communicating the potential price moves, such as sending price lists electronically, but are informing players of the changes by telephone calls.
Enthusiasm for the potential price hikes seems to be high from the producing side, but much will depend on how much support is found in the buying community.
Distributors are astonished over the talk of a price increase amid poor market conditions.
"The domestic market is depressed -- even weaker than reported in the past months -- and a price adjustment would undermine it even more," one said.
Said another: "If [flats producers] raise their prices, they will probably need to step back. Higher prices won't stick."
The source added the move would be contradictory to recent measures, because "mills have been actually giving more discounts than before, reaching 3%-4%. Before the discounts were around 2%-3%."
Brazilian steel mills do not comment on their pricing policies.
Platts assessment for Brazilian domestic hot-rolled coil is at Real 1,950-2,060/mt ($472-$499/mt) for September purchases. Cold-rolled coil was assessed at Real 2,240-2,360/mt, while hot-dip galvanized coil was assessed at Real 2,580-2,770/mt. The monthly assessments are all ex-works, excluding taxes.
Source: Platts
- metaljunction »
- Metal News
Metal News & Events
METALJUNCTION PUBLICATIONS
Coal Insights (English) Monthly
Coal Insights is a ready reckoner for anyone associated with coal. This publication is aimed at tracking everything related to coal in India.
India Coal Market Watch(English) Monthly
ICMW is a one-stop source for all news, data and research pertaining to coal demand, consumption, stocks, spot- and long-term prices with respect to the Indian Market.
India Steel Market Watch (English) Monthly
ISMW is a brand new high-end steel market report, covering all aspects of the steel industry in India.
Steel Insights(English) Monthly
Steel Insights delves into various facets of the domestic and global steel industry such as market fundamentals, raw material price trends, price forecasts etc.