Brazilian flat steel imports from India in June rise 118.1% over last year

RIO DE JANEIRO, BRAZIL – Flat steel imports by Brazilian clients grew 118.1% in June, compared to the same period last year, adding up to 225,970 tons. In the semester, 944,390 tons were imported, a 103.8% increase. The data was released today by the National Institute of Steel Distributors (Inda).

According to Inda’s executive president, Carlos Loureiro, added to slab purchases, steel imports reached 364,400 tons in June. “Imports are an important factor in the reduction of distributors’ margins. This is because the volumes that arrived in June were bought in January and February at prices around US$200 to US$300 lower than those produced in the country. I believe that imports should increase their participation in the apparent consumption this year,” said Loureiro.

According to Inda’s data, sales in June totaled 300,000 tons, a 3.3% increase in relation to the same period last year. Compared to May, however, sales fell 6.4%. In the year to June, distributors sold 1.92 million tons, a growth of 28.8% compared to the first half of 2020. In 12 months, the rise was 25.7%, reaching 4.04 million tons.

“We are reaching the normal level. In June, daily sales totaled 13,600 tons. Our estimate is that in July the volume sold will fall by 7.7% in relation to June, reaching 277,000 tons,” said Loureiro.

The steel purchases totaled 347,300 tons, an increase of 16.8% compared to June last year. Compared to May, the purchases were stable – a slight increase of 0.5%. According to Inda’s data, in the year accumulated, distributors acquired 2.03 million tons, an evolution of 31.3%. In 12 months, the growth was 22.5%, reaching 3.94 million tons.

With this dynamic, the distributors’ stocks totaled 785,800 tons, a drop of 8.2% compared to the same period in 2020. This volume represents 2.6 months of sales. “Inventories rose almost 50,000 tons from May to June. And we believe that it should also be high in July, representing a turnover of 3.1 months. A high volume considering the new market dynamics and the prices that are higher than last year”, pointed out Loureiro.

The prices, according to Inda’s president, have already increased 65% this year. In twelve months the readjustment was between 160% to 170%, according to Loureiro. However, he believes that there is no room for new increases in the short term. “Today the parity between the imported and the domestic product is around 15%. With the dollar between R$5.20 and less than R$5, the prices of scrap, iron ore, and coal stable in the international market there is no room for readjustment in the short term,” he said.

Brazil was a net importer of finished steel during the first quarter of 2021 for the first time since 2014 amid a domestic supply-demand imbalance, according to data from the Economy Ministry.

The country purchased 49,976 tons of steel more than it exported. The figure takes into account unalloyed, non-special steel: hot- and cold-rolled coil, galvanized and Galvalume, and heavy plate, as well as rebar, wire rod and sections.

Imports of rolled steel totaled 602,417 tons in the January-March period, up 98.59% from 303,345 tons in the corresponding months of 2020.

Meanwhile, the country exported 552,441 tons of rolled steel, a 19.21% year-on-year decrease from 683,797 tons.

The negative balance – the first reported by the country since the third quarter of 2014 – came from the flat-rolled steel sector, since exports of long steel surpassed import volumes.