Flat steel sales volumes from Brazilian distributors dropped by 10.90% year-on-year in December 2018, due to lower international prices and a number of holiday absences during the month.
Brazilian flat steel domestic shipments amounted to 169,900 tonnes, compared with 221,100 tonnes in December 2017, according to figures released by national flat steel association Inda on Tuesday January 22.
Clients were less eager to build stocks because of the weakness of international steel prices, Inda president Carlos Loureiro said.
"No one expects Brazilian domestic steel prices to rise amid the current downtrend in international steel prices and the weakness of the United States dollar," he added.
Currently, the difference between prices for domestically produced steel and imported material - the so-called premium - is more than 15% on most flat steel products, including hot-rolled coil (HRC).
Analysts Leonardo Correa and Gerard Roure from Brazilian bank BTG Pactual estimated domestic premiums to be around 15% over imports for flat and long steel, according to a report distributed on January 21.
"Although this level of premiums could be considered risky by many market observers, we still believe they could. be sustained at higher levels, given the lack of import pressure," the analysts wrote.
Fastmarkets' weekly assessment of South American HRC import prices was $520-530 per tonne cfr on January 18, stable week-on-week.
"Domestic producers must be worried about the dollar fluctuations," Loureiro said.
Distributors' sales of HRC totaled 85,600 tonnes in December, down by 15.60% year-on-year, while sales of cold-rolled coil (CRC) came to 34,400 tonnes, down by 19.70%, and hot-dipped galvanized coil (HDG) sales were 50,300 tonnes, a drop of 25.90% in the same comparison.
Inda expected sales to improve in January 2019, to 264,000 tonnes, although this would be down from 283,800 tonnes in January 2018. In 2018 as a whole, distributors sold 3.09 million tonnes of flat steel, up by 4.20% from 2017's level of 2.97 million tonnes.
Distributors' flat steel purchases reached 196,900 tonnes last month, down from 221,100 tonnes in December 2017.
Inventories came to 939,400 tonnes, or five months'-worth of sales, compared with 900,500 tonnes in December 2017.
source: fastmarket |
