SPOTLIGHT: Rumours on flat steel price hikes intensify in Brazil

May 18, 2012 | 11:58 AM |

A growing number of Brazilian flat steel distributors and service centres have been receiving indications from local steelmakers about possible price rises of about 5% in the domestic market within the next few months. The possible readjustment would be mainly supported by the depreciation of the Brazilian Real against the US dollar over the past few months, which has been discouraging distributors and service centres from closing import deals, sources said. On the back of the financial uncertainties related to the European crisis, the US dollar reached 2 Reais this week – its highest level in almost three years and up by more than 15% from the 1.7 Real levels seen in February. “The import market has virtually stopped right now because of the exchange rate, at least in the south-east and southern regions,” one trading source based in São Paulo said. Only distributors from Brazil’s northern and north-east regions continued to import flat steel regularly, since they are located far away from the country’s flats mills in the south-eastern states of São Paulo, Minas Gerais, Espírito Santo and Rio de Janeiro. There are....