Flat steel distributors in Brazil saw business shrink in April amid rising local prices by mills, with sales volume dropping 11.8% on the year and 20.9% on the month to 302,700 mt, data from Inda, the national flat products distributors association, showed May 24.
According to S&P Global Commodity Insights, the Brazilian domestic hot-rolled-coil price rose 13% on the year from January to April to Real 6,700/mt ex-works, taxes excluded, with a 9.8% increase only during March and April.
The product is still at high levels when compared with the pre-pandemic period, but down from the peak of Real 7,000/mt recorded in June 2021.
According to Inda’s president Carlos Loureiro, “domestic prices for hot-rolled-coil have been with a premium over 20% on top off imported material, but the uncertainty about the exchange rate and logistical difficulties make importing a risky game”.
Flat steel imports ended the month of April with a drop of 12.5% on the year and 12.4% on the month, to 109,800 mt.
Amid this, distributors have been keeping inventories at levels sufficient to meet only their prompt needs for their operations.
Purchases from distributors in April fell 27.5% on the year and 27.7% on the month, to 250,100 mt.
In April, the volume of flat steel stocked by distributors was 721,800 mt, down 6.8% compared with March, reflecting a turnover of 2.4 months of sales.
In the first four months of the year, apparent steel consumption in Brazil dropped about 14% on the year, data from national steel association Aço Brasil showed last week.
For May, Inda expects purchases by distributors to increase by 14%, with sales falling by 5% compared with April.
— Adriana Carvalho