Brazilian steel pricing outlook bullish for November: Platts survey

Sentiment in the Brazilian steel market was found to be bullish on pricing for November, with traders and consumers 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 November, the index for finished steel price development dropped 1.44 points to 42.3, 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 consumer respondents were the most bearish about the potential price drops, with an index reading of 33.3 points, followed by traders’ expectations, with an index reading of 37.5.

“Steelmakers have already announced some price cuts for the fourth quarter, with some stability expected for Q1 2022,” said a flat steel end-customer.

Another consumer is seeing a general price fall for flats steel products, including zinc-coated material.

Traders see the arrival of imported material and strong volumes sitting at bonded-warehouses as the reason for the current pricing pressure.

Steel producer respondents were mostly betting on price stability, with an index at 50 points, despite mixed responses seen within the group.

Nevertheless, expectations regarding steel production were firmer, with the index rising 1.8 points on month to 59.6 to November.

Consumers and producers were notably optimistic regarding production levels with index readings of 66.7 and 62.5 points, respectively.

As for raw materials prices, a declining trend remains possible, but expectations seemed to be converging towards some stability. General respondents were at 46.1, up 3.97 points from the previous month, with producers at 50.

The index for inventory sentiment stood at 60.6, down 1.9 points, still suggesting a moderate rise in stored volumes.

“The market is in a standstill; inventories’ levels are below three months of sales, but there are no purchases at the end-side of the business…. while imported material is sitting at the ports,” one trader said.
Source: Platts