The fundamentals behind the 2020 Brazilian ferrous scrap price rally will continue to have momentum in 2021 as domestic and global steel production continue sustaining demand for the raw material. However, large volumes of scrap imports arriving February-March into the Latin American nation could break the stride in market prices.
Prices for the most traded ferrous scrap grades in Brazil kicked off the year ranging Real 625-700/mt ($120-$135/mt) FOT, but have escalated since June following the reactivation of mill furnaces amid stronger-than-expected steel demand.
Year-to-date, spot prices for Brazilian HMS 1/2 grade jumped 120.5% and hit the record high value of Real 1,450/mt ($279/mt) FOT on Dec. 21.
Brazilian steelmakers were active in the global bulk scrap market in October-November, chasing at least 300,000 mt of shredded and HMS grades from Canada and the US, paying premium prices compared to Turkish mills, sources said.
One trader noted it’s not guaranteed that all mills succeeded contracting their desired volumes, as some were late on their procurement schedules and other nations such as Peru and Mexico were strongly demanding at the same time.
Brazil is not a typical importer of scrap, sources said. In the first eleven months of 2020, imports totaled 57,567 mt, down 66.7% on year, according to customs data…
