The South American import market for flat-rolled steel remained on an upward trend in the week to Friday March 12 with more expensive offers from China and Japan, but acceptance of these became less common with ship availability still low and freight rates remaining high, holding prices back.
Two main factors were putting pressure on the market: the bulk freight situation and a potential cut in the export tax rebate in China.
Buyer and seller sources were still reporting difficulties in booking cargoes, with no certainty of delivery time or sea freight costs. Skepticism was also fueled by a lack of clarity on the export rebate.
Soaring oil prices and a vessel shortage, especially in Asia,
have driven up the bulk freight rates to South America over the past three weeks, to $50-75 per tonne from $30-40 per tonne depending on the port of destination.
At the same time, there has been huge uncertainty about Chinese exports to the continent with market participants expecting the government to reduce a 13% export tax rebate for steel to 8-9%.
"Recently...