Mills will readjust steel prices by up to 12.5% By Ivo Ribeiro Brazilian steel manufacturers, particularly rolled sheet mills, are launching a new round of price adjustments for their products this Friday (27). Their main customers – from the distribution, construction, industrial and automotive markets – have already been notified of the new price lists. The main objective of companies is to rebuild margins, after a long period of loss of profitability in their balance sheets. The news from Valor PRO, Valor's real-time information service, boosted shares of Brazilian steelmakers at the opening of trading on the B3 yesterday: CSN rose 8.55%, closing the day at 6.35%. Gerdau PN rose 3.8% and closed at 2.94%. Usiminas, after reaching 5.44%, fell to 2.27%. Companhia Siderúrgica Nacional (CSN) opens the season with a 12.25% increase for hot and cold coils and 10.75% for galvanized (zinc-plated) material. At the beginning of the month, the company readjusted the metal sheets (used in packaging manufacturing) by 9.75%. It was the first of the year, said a customer. According to an industry source, the steelmaker is also beginning discussions with automakers about price rebalancing, citing the impact of the exchange rate on its cost structure. Negotiations with automakers are traditionally concluded at the beginning of the year. In January, the price increase ranged from 18% to 23%. In June, CSN had already passed on an increase of 11.75% for hot and cold rolled sheets and 8.25% for galvanized sheets. Usiminas had increased its products – the same mix as CSN, with the exception of metal foil – by around 12%. Valor has learned that ArcelorMittal will readjust hot and cold coil prices by 12.5% starting August 1st and steel coated (galvanized) by more than 9%. Gerdau will apply a 12% surcharge to hot-rolled steel in early August. Usiminas is expected to release its new price list, following its competitors, but has not yet defined when it will take effect. This year, with these adjustments, steel mills' price increases have already reached around 30%. This is the third time that Steel mills align steel prices and this has become more pressing with the appreciation of the dollar against the real. In the long steel segment – primarily for civil construction and infrastructure projects – CSN implemented a 12% increase in rebar manufactured in Volta Redonda in June. It announced a further 6% increase this month. ArcelorMittal, Gerdau, and Simec are following a similar trajectory, as they operate in the same markets and have similar production costs. Companies' justifications for raising their prices, according to a source who spoke to Valor, range from continued high steel prices abroad, which causes import premiums for imported materials to remain zero or even negative, to exchange rate fluctuations and the sharp rise in metallurgical coal and coke, important raw materials after iron ore. From the first to the second quarter, coal prices rose from US$210 per ton to US$250, while coke prices jumped from US$280 to US$370. Higher freight prices following the truckers' strike in May also contributed. All of this weighed on steel manufacturers' budgets, one source noted. When the dollar reached R$3.90, he explained, the premium for domestic steel over imported steel reached between 12% and 14%, depending on the product. In other words, Brazilian-made steel was much cheaper to buy. In China, the price of hot-rolled coil, the international market benchmark, is between US$590 and US$600 per ton (R$2,250.00). In the United States, the same ton sells for US$1,015. In December, it was worth US$700 – a 45% increase. A significant portion of this increase is due to President Donald Trump's 25% tariff on imported steel, announced in March.
Source: O Valor Econômico Newspaper
