Steel Price Tracker: Brazilian price hikes face difficult environment

Research evidence excerpt

Steel Price Tracker: Brazilian price hikes face difficult environment

Weekly news flow

Asia: Prices mixed w/w; BF op rates at 90.3%

Steel export prices were mixed in China last week, with Chinese exported hot rolled coil

(HRC) down $3/t to $496/t and rebar up $2/t at $503/t. According to BofA’s China Basic

Materials team, steel markets were volatile and divergent this week, with early strength

in coking coal reversing on policy pressure and weak downstream demand, before

rebounding on renewed supply tightness. Iron ore also firmed on shipment constraints

and tighter liquidity, while in the spot market, a sixth round of coke price hikes further

squeezed steel mill margins amid sluggish demand and weak trading activity. Spot rebar

cash margins narrowed by RMB 46/t to -RMB 334/t, while spot HRC margins declined by

RMB 36/t to -RMB 360/t. (see China Basic Materials latest update). Meantime, Blast

furnace (BF) capacity utilization rate among 247 Chinese steel mills under Mysteel's

survey nudged up by 0.1 percentage point on week to 90.3%.

According to Platts, Asian steel market conditions remained mixed, with HRC prices

declining amid rising inventories, sluggish buying interest, and the seasonal slowdown in

demand, despite some cost support from higher coke prices. Trading activity in flat steel

was subdued, with buyers remaining cautious and limiting purchases to near-term needs,

leading sellers to offer discounts to stimulate demand. In long steel, billet and rebar

prices moved higher, supported primarily by rising production costs, although

downstream demand remained weak and trading activity mediocre, keeping market

sentiment cautious and raising uncertainty over potential production adjustments.

Türkiye: rebar prices down w/w