Brazilian steelmaker Companhia Siderurgica Nacional (CSN) confirmed Wednesday contract-price hikes of 18%-23% on its flat steel products directed to the domestic automotive and industrial sectors, in effect since January 1. CSN increased the flat-rolled steel prices for automakers in 23%, through six- to 12-month contracts.
The current adjustments are well above the ones applied in 2017 of 10%-12%. In 2015 and 2016, automakers did not receive price increases.
The Brazilian auto industry accounts for about one-third of the country's steel demand.
Producers of white also received their three- to six-month contracts readjusted by 18%-23%, depending on the negotiation.
Both sectors consume mainly cold-rolled coils.
"It's all about recompose margins," said Luis Martinez, CSN's commercial director, explaining that "margins lagged throughout the Brazilian economic crisis"
A source from an automaker confirmed receiving the new pricing lists.
CSN also attributed the decision to the recovery of hot rolled coils prices in the international market, in addition to reflecting higher iron ore and coke costs.
Usiminas and ArcelorMittal are expected to follow suit on CSN's pricing strategy to the industrial customer base.
Initially, Brazilian flats makers were seeking price hikes of about 25% to the sector.
The adjustment is in line with the increases applied on spot prices for independent distributors during 2017.
