Brazil electric goods manufacturers question steel price hikes rationale

Brazilian association of electric and electronic goods manufacturers Eletros is questioning the "economic rationale" behind what it says are successive steel price hikes.

Eletros took out advertising space in major Brazilian newspapers to air its views.

The association says companies in the steel sector announced a 5% increase at the end of 2015, followed by another two 12% hikes in May and June, respectively, newspaper Valor Econômico reported.

"A new 5% hike is being announced, leading to a price increase of nearly 40% in 2016," Eletros is quoted as saying, noting that "flat-steel-consuming sectors domestically and globally are shrinking."

The association says measures taken by steel producers in the country are not commensurate with the current crisis affecting the market and with the local supply and demand balance, the report said.

Eletros adds that local electric and electronic goods firms are suffering in the face of competition from imported products made with lower priced raw materials.

But the association acknowledges efforts being made by the steel industry to increase efficiency and reduce costs to help bring the price of domestic steel in line with that of foreign steel. This, it said, will favor local manufacturers and consumers.

Eletros members include Canon, LG, Electrolux and Black & Decker.