Brazilian steel maker Companhia Siderúrgica Nacional Steel (CSN) will increase its flat and long product offers from January 2020, the company recently revealed to analysts. This price increase is necessary because Brazil's domestic price is nearly 4-6% lower than the imported steel price, and the recent exchange rate of the real against the US dollar has also weakened.
According to Luis Fernando Martinez, CSN's commercial director, the company will raise prices by about 10%. The price negotiation between CSN and Brazilian automakers has also entered the final stage, and the annual contract price is expected to increase by 5% to 7.5%.
Two other Brazilian steel companies, Gerdau and Usiminas, have informed customers that they will raise prices in the domestic market. Analysts said ArcelorMittal is also expected to follow up the price increase in January. Gerdau is preparing to raise prices of all steel products by 8% to 12% starting next month. Usiminas plans to raise flat steel prices by another 5% based on the price increase announced in October.
Analysts commented that "the planned price adjustments will have a positive impact on the steel industry." The Brazilian steel industry continues to maintain a positive outlook in the medium term. The main driving factors include increased domestic consumption in Brazil, active new infrastructure projects and high-end private construction activities, Improved steel demand in China.
Although the United States is likely to reinstate Brazil's Section 232 tariffs, the analyst expects that this will have limited impact on the Brazilian steel industry and he remains confident in the recovery of the Brazilian steel industry.