Metal Bulletin’s monthly price assessment for Brazilian local rebar was stable month-on-month on Friday August 4, at 3,250-3,410 Reais ($1,028-1,079) per tonne delivered, all taxes included, a value that is expected to be maintained in September.
Brazilian mills were said to be attempting to raise rebar prices by about 10% this month, stimulated by higher long steel prices in the global market and increases in flat steel prices announced locally, according to sources.
But unlike the flat steel segment, long steel demand in Brazil is still reported to be weak, mostly due to the low level of activity in the construction sector.
“An increase in long steel prices would be hard to pass on [to the whole steel chain],” a distributor said.
The construction sector, which takes as much as 65% of the steel consumed in Brazil, is expected to recover only from 2018 onward.
As a result of the country’s subdued economic activity in recent years, Brazil saw long steel consumption levels fall by 36% in 2016 compared with 2013, to 7.70 million tonnes from 11.90 million tonnes, according to figures presented by Gerdau ceo André Gerdau Johannpeter
during the Brazilian Steel Congress last week in Brasília.
Brazilian long steel export volumes, meanwhile, rose to 1.70 million tonnes in 2016 from 1.20 million tonnes in 2013, according to Johannpeter.
The poor conditions in the domestic market “led us to export”, he said.
Brazilian long steel producers continue to bet on foreign markets to keep their mills operating.
In mid-August, rumours of offers from Brazil led Latin American long steel prices to increase
Metal Bulletin’s weekly price assessment for Latin America-origin rebar exports rose to $540-545 per tonne fob on August 21, from $490-500 per tonne fob a week before.
Over the same period, Metal Bulletin’s weekly price assessment for Latin America’s wire rod exports also rose to $540-545 per tonne fob from $490-495 per tonne fob.