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Brazil's slab export prices near 'bottom line' - 18 June 2012

Declining prices of CIS-origin slabs and softening demand in Asia have pressured Brazilian mills to cut their slab export prices by about US$45/tonne for July shipments, trading companies said.

Several traders have heard offers of US$540/t fob to Asia, although some tonnages at US$550-560/t fob Brazilian port are said to be Arcelormittal Tubarão's offer to Latin American countries. In May, bookings were closed at around US$588-595/t fob Brazil.

"We are reaching a tipping point, where there is no way to further reduce prices," said a regional trader, adding that prices lower than that mean mills will reach their slab production costs.

Brazilian mills have also reduced export prices for flatrolled products, but the move hasn't enticed buyers yet.

Traders said some bookings of commercial grade hotrolled coils closed at US$680-690/t cfr Latin American countries three weeks ago. Deals for coldrolled coils reached US$750/t cfr, "but now importers are pressuring us for prices US$10-15/t lower," one source added.

In May, Brazil exported a total of 486,946 tonnes of slabs, up 18.6% on the 410,363 t in April, according to official customs data


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