Brazil is facing unpredictable market conditions over the next quarter, according to some yards and traders. Sometimes it feels like we are moving forward and then like we are going backwards again. The economy is unstable and exchange rates move up and down every week, with the variation as much as 10% some months.
Steel market prices went up 18% for the last month but mills dropped scrap prices by an average of US$ 30 per ton compared to April levels. Also, they are verticalizing purchasing and competing directly with recycling companies. Given this scenario, it seems impossible for scrap companies to manage and plan their next steps, relying on the solution of day-to-day deals.
Regarding COVID, Brazil has suffered more than 400,000 deaths and some cities have introduced restricted hours for non-essential businesses. However, infections are dropping and Brazil’s vaccination numbers are bettered only by producer countries such as the USA, the UK, China and India. Indeed, it is hoped to have the whole population protected by October or November this year.
INESFA, the Brazilian Association of Iron and Steel Companies (BRA), Board Member of the BIR Latin America Committee