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Brazilian steel market sentiment mixed for October: Platts Survey

Sentiment in the Brazilian steel market was mixed going into October, with producers being the most bearish among respondents, according to the monthly survey of the market by S&P Global Platts.

In the survey of Brazilian producers, distributors, traders and end-customers conducted ahead of October, the index for finished steel price development dropped 2.75 points to 43.75, signaling expectations of further downward corrections. On a more general level, readings above 50 are interpreted as bullish, and readings below 50 are interpreted as bearish. A reading of 50 means no change.

Steel producers’ respondents were the most bearish about the potential price drops, with an index reading of 31.25 points.

“Lots of competition among distributors pushing end-users flat steel prices down,” one producer source said. “There is also a significant volume of imported rebar and wire rod underway, which may pressure local prices.”

Flat steel consumers and distributors, however, were unanimous about views of a price stability scenario for October, with an index of 50 points, compared to 41.6 for September.

“Some mills that were offering at higher values in early September stepped back and lowered prices at the end of the month… Others were already managing stable prices, and so should remain,” one flat steel buyer said.

Expectations for steelmaking raw material prices rose to 42.1, from 39.6 in September, but still pointing to potential downsides.

Producers’ view was notably firm on raw material price corrections, with an index at 25 points, down 5 points from September.

As for finished steel production, respondents were not seeing major changes in October, with the index rising 0.11 points to 57.81.

“Steelmakers may push steel production up a bit in October ahead of the water crisis that should intensify in November,” one scrap dealer said.

Producers and consumers, in contrast, expect stability in production levels, with an index reading of 50.

Lastly, the index for finished steel inventory levels were at 62.5, up from 58.6 in September. The result was mainly influenced by traders’ expectations of import arrivals, with an index of 66.6, while producers and consumers see no changes at 50.
Source: Platts

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