Brazil: steel imports lose momentum in October and fall 34%

Throughout October, distributors’ flat steel sales increased by 5.2% compared to September, reaching a volume of 340,000 tonnes. During this period, there was a slowdown in flat steel imports, which were 34% lower than in September. Despite the decline, the volume remains high at 204,600 tonnes, surpassing the amount recorded in October 2022 by 15%. In the first ten months of 2023, imports grew by 47.3%, according to data from the National Institute of Steel Distributors (Inda).

Imports have impacted the performance of domestic steel mills, prompting them to plan shutdowns. Nevertheless, no changes in steel prices are expected, and they are likely to remain stable in the coming months.

According to Inda’s president, Carlos Loureiro, steel sales through distributors increased during this period, and the projection is to end the year with a growth rate between 1% and 1.5%. According to Inda’s data, compared to the same month last year, sales increased by 9.7%. For November, the sector expects a 4.5% decrease compared to October.

Daily sales also saw an increase. “Our daily sales remained solid, at an average of 17,000 tonnes per day. Thus, the volume is second only to October 2020, when we recorded our peak sales due to mill shutdowns, causing the buying market to shift from mills to distributors.”

Regarding purchases, there was a 9.1% increase compared to September, with a total volume of 352,300 tonnes, against 322,800 tonnes. Compared to October last year, when 316,500 tonnes were purchased, the increase was 11.3%

The chart below – developed with DataLiner data – shows Brazilian steel imports (hs 7326) from Jan 2020 and Sep 2023.

Steel imports from China | Jan 2020 – Sep 2023 | TEU

Source: DataLiner (click here to request a demo)

Stocks

More purchases than sales led to an increase in stocks. Thus, in absolute numbers, the October stock grew by 1.5% compared to the previous month, reaching 855,700 tonnes against 843,400 tonnes. The inventory turnover closed at 2.5 months.

“Our stocks only increased by 12,000 tonnes, which was the difference between sales and purchases. Anyway, the turnover is very good, at 2.5 months. The network remains quite cautious, not allowing stocks to get out of control. In the market, the expectation is for price stability.”

Steel Imports Drop, yet Volumes Remain High

Inda’s data also reveals a drop in imports in October. The decrease was 34% compared to the previous month, with a total volume of 204,600 tons against 309,800 tons. However, compared to the same month last year (177,900 tonnes), imports increased by 15%.

Year-to-date, in the first ten months of 2023, the increase is 47.3%, with 1.99 million tonnes entering the domestic market.

“Imports were still high but lower than in September. I believe this resulted from removing the import discount, and thus, everyone rushed to nationalize the product.”

Prices Will Remain Stable

The increase in steel imports has prompted mills in the country to seek government actions to curb steel entry into the domestic market. Some have already announced shutdowns.

According to Inda’s president, Carlos Loureiro, despite the move, there are no expectations of changes in steel prices, either upwards, which could occur if there is a taxation of imported products, or downwards.

“I don’t see any special possibility of price changes in the short term in the coming months. Usiminas is now returning with blast furnace 3, which has a 20% larger capacity. So, there is a significant resumption of flat production, narrowing the market. Even with a drop in sales, the mills have resisted reducing prices.”

Source: Diário do Comércio

Click here to read the original news article: https://diariodocomercio.com.br/economia/importacoes-aco-perdem-forca-em-outubro/#gref

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