Flat steel prices in China 'approaching peak'

The price of flat steel in China, currently at US$555/t, seems to be approaching its peak as the spread in the Asian country is now at the highest level since 2010.

That is according to Brazilian steel distributors association Inda's president, Carlos Loureiro, who was quoted as saying flat steel prices in China should not rise further, news service Agência Estado reported.

According to the report, iron ore prices are expected to fall slightly this year, making it difficult to justify the spread at the current level.

Iron ore dipped marginally on Wednesday, as there was no physical trading at Chinese ports. Prices were down US$0.18 to US$62.24/t, compared to the previous session, reaching a month-to-date average of US$61.85/t, according to Metal Bulletin. So far this year, the highest the commodity has reached is US$94.9/t, in February.

Adding to the international price scenario, local steelmaker CSN was able to implement the price increase announced earlier this month, but the movement was not followed by other flat steel producers in Brazil.

"Because of the risk of steel imports [coming from China], the plants are looking very closely at the possibility of any price increase this year," Loureiro was quoted as saying. According to the executive, premiums paid for imported flat steel are now between 10% and 15%, considering the exchange rate.

According to Inda's figures released on Tuesday, steel imports spiked last month 117% year-on-year to 136,400t, and rose 17.2% compared to August, the association said.

However, Loureiro forecasts imports to be lower in October, the report said.