Home / Commodities / Commodity News / Brazil steel market sentiment improves in January: Platts survey

Brazil steel market sentiment improves in January: Platts survey

Brazilian steel market sentiment has turned up in January, with most market participants expecting a general upward momentum, according to the latest monthly survey by S&P Global Platts.

In the survey of Brazilian producers, distributors, traders and end-customers conducted from late December to the beginning of this month, the index for finished steel price development jumped 30.2 points to a reading of 75 – the highest index recorded since the debut of the survey in July 2021.

In general, readings above 50 are interpreted as bullish, and readings below 50 are interpreted as bearish. A reading of 50 means no change.

Producers were notably bullish, with a price index reading of 92.8 points.

“Automakers have just absorbed a 50%-70% hike in their annual contract prices, while distributors are expected to restock,” one producer said, signaling that increasing steel prices are on the January agenda.

Consumers in general were also expecting price adjustments for the month, with an index of 72.7, boosted mainly by the expectations of long steel buyers.

“I believe the market will continue to be regulated this year by national demand and by foreign supply, but we still don’t know how consumption in the civil construction sector will be in this unstable economic scenario,” one consumer said.

As for raw materials prices, overall respondents put the index at 75.9, a jump of 25.9 points from the previous month.

Producers were the respondents with firmer expectations of increasing raw materials costs, at 92.8 points, followed by traders views at 82.1.

“The intense rainfalls hitting the country are hampering iron ore production, scrap recollection and logistics in general; costs are inevitably higher,” one producer said.

Charcoal prices have soared during the rainy period, according to a respondent, “which will impact pig iron costs and prices for sure.”

One scrap dealer said that despite raising buying prices for weeks, volumes coming into his yards have been reduced. “There is a limited offer of obsolete scrap,” he said, adding that most steelmakers, in turn, have increased their buying needs.

As for finished steel production, the index rose 25.7 points to 76.8 in January, pulled mainly by producers’ view at 89.3.

“We expect to produce at full steam in 2022,” one producer stated.

The index for inventory sentiment was higher at 74.1 points, and very aligned with consumers, producers and traders.

“It’s a period of restocking, but logistics issues due to the rains and sectors’ demand will guide this period,” one consumer said.
Source: Platts

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping