Brazilian flat steel producers have cut discounts they had given on spot negotiations since November, even though lackluster demand persists, domestic distributors said Wednesday.
The Platts monthly assessment for Brazilian domestic hot-rolled coil rose to Real 1,800-1,940 ($438-$472)/mt, ex-works, excluding taxes, for February shipments from Real 1,750-1,880 for January shipments.
Cold-rolled coil was assessed at Real 2,080-2,190/mt, same basis, up from Real 2,040-2,140/mt, while hot-dip galvanized coil rose to Real 2,410-2,580/mt from Real 2,360-2,500/mt.
Currency exchange rate on Wednesday was Real 4.07/$1.
According to industry participants, demand remains "very poor", and despite the desire of raising prices, mills opted for holding new price lists while slowly remove discounts.
"If one steelmaker adjusts prices upwards, it will probably lose market share to the competitors," one executive said.
Another source explained that "mills are currently working in debt and a price hike is needed," he said, acknowledging the market will hardly absorb it.
Even though, discounts were still reported by all the sources contacted in the survey, but at smaller levels.
"It is the same -- depending on the deal, clients get a percentage of discount," one executive said.
Another buyer said mills gave stronger discounts in early January, but were forced to step back, returning to 2015 levels.
