Brazil Steel is expected to exceed 4 million tons of imported steel in 2010

Brazilian steel importers stated that Brazil’s steel imports in 2010 will continue to rise, from 1.8 million tons in 2009 to a record 4 million tons, as Brazil’s real strength has promoted speculation.

Integrated media reported on August 20th that Osvaldo Sicardi, President of Imexbra Trading SA, Rio de Janeiro’s steel importer and exporter, said that Brazil’s imported steel products will continue to be strong, rising to a record 4 million tons in 2010, more than double the 1.8 million tons in 2009.

Sicardi said that imports will continue to rise from the 2.8 million tons in the first half of the year due to the strong Brazilian real.

He said that imports will continue to increase and problems still exist because the Real is overvalued and promotes speculation. Imported steel, which is denominated in dollars, is an attractive business in Brazil. Brazil's domestic steel prices are 25% to 30% higher than the international market. Steel processing plants and independent traders and distributors are importing steel to capture the profitable opportunities of reselling these products.

Flat steel products can be imported to Brazil at a price of $700 per ton, and can be sold for $1,000. Brazilian steel mills are unlikely to drastically downgrade sales prices in the domestic market, although they are currently offering discounts to sector customers and hoarding record steel in Brazil.

Sicardi stated that the risk of end customers buying steel directly from foreign markets is that steel may take up to 100 days to reach Brazil. Therefore, imported steel is mainly purchased by steel mills and distributors. They have stock and can wait for the arrival of steel and resale to end customers at a higher domestic market price.

According to data from the Brazilian Central Bank, the US dollar that flowed into Brazil’s financial market in July was US$1.5 billion more than the US dollar. Experts believe that the high interest rate policy adopted by the central bank is attracting large amounts of foreign capital to Brazil and will boost the appreciation of the local currency’s real. The experts of the Meisheng Group said that compared with Europe, the United States, Asia, Japan, and other places, Brazil’s benchmark interest rate is much higher, making the carry trade renewed. In addition, Brazil’s political and financial markets are relatively stable and its economic growth is strong. These are important factors in attracting large inflows of foreign capital.

At present, the Brazilian Central Bank’s benchmark interest rate is 10.75%, while the United States’ benchmark interest rate is at the historically lowest level of zero to 0.25%, the eurozone’s benchmark interest rate remains at a low level of 1.0%, and Japan’s benchmark interest rate is maintained at 0.1% over the long term. The ultra low position.

In addition to buying Real directly, the stock market has become another popular route for foreign capital to flow into Brazil. In July, the largest stock market in Latin America, Brazil's stock exchanges flowed into foreign capital at about R$ 3.5 billion. The influx of a large number of dollars made the Brazilian currency Real a strong trend.