South American steel market: Demand is rising and many countries are developing rapidly

1. Market prices fluctuate​

As of May 10, the prices of imported plates in South America have fluctuated. The price of hot-rolled coils is 580-600 USD/ton (CFR), which is unchanged from the previous week. The price of cold-rolled coils has increased from 630-650 USD/ton (CFR) on May 3 to 630-660 USD/ton (CFR). The price of medium and thick plates remains stable, in the range of 640-660 USD/ton (CFR). The price of hot-dip galvanized coils has increased significantly, reaching 750-770 USD/ton (CFR), up 20-30 USD/ton from the previous week. ​

According to South American market news, from May 6 to 10, the actual transaction of cold-rolled coils and coated and galvanized plates in the South American plate import market was good. Chinese suppliers have generally raised their quotations for plate exports to South America, but most of them are willing to offer a certain discount when the actual transaction is completed. During the same period, freight rates have also increased to a certain extent. Currently, freight rates from China to South America are about US$50-55/ton. ​

2. Peruvian port accident affects iron ore supply​

At about 2 pm local time on May 5, the gantry crane loader of Shougang Peru Iron & Steel Company in San Nicolas Port (also known as Marcona Port) in Peru suddenly collapsed, and the equipment hit the bulk carrier being loaded. Although the accident did not cause casualties, the only loading equipment at the port was completely destroyed. Due to the lack of similar equipment suppliers in South America, it needs to be customized and transported from China. The repair cycle is expected to be 3-6 months, during which time the port's iron ore shipments will be completely suspended. ​
Shougang Peru Iron & Steel Company has announced the activation of the force majeure clause, suspended production activities, and taken gradual measures to reduce the impact on workers, such as arranging holidays in advance. However, the Peruvian Miners' Union accused the accident of being caused by the company's management negligence, demanded a thorough investigation of the responsibility, and opposed the mandatory vacation policy.​

In 2024, China imported 22.4 million tons of iron ore from Peru, an average of 1.47 million tons per month. Peru is China's fifth largest source of iron ore. The port shutdown is expected to reduce China's iron ore supply by about 1.5 million tons per month. This will not only have an impact on China's iron ore market, but also, due to the interconnected global iron ore supply chain, steel production companies in South America that use iron ore as raw material may also face a tight supply of raw materials, which will in turn affect the production and supply of steel.

3. No major new regulations have been issued at the policy level, but there are more potential influencing factors

At present, South American countries have not issued new major policies and regulations at the policy level of the steel industry. However, there are some potential influencing factors. For example, China's steel exports have now started a random VAT verification mechanism, and some industry insiders predict that inspections may be further tightened after May 1. Although this measure is aimed at China's steel exports, South America is one of the important export destinations for Chinese steel. In order to respond to the verification, Chinese exporters may adjust the quotations of products such as hot-rolled, cold-rolled and hot-dip galvanized coils exported to South America, thereby affecting the price and supply pattern of the South American steel import market.​

In addition, Brazil's anti-dumping investigation on Chinese cold-rolled and coated products has been extended to early 2026. Although no temporary anti-dumping tariffs have been implemented yet, the ongoing investigation has made the trade environment of the South American steel market uncertain. Brazilian traders and related companies are more cautious in purchasing decisions. Some buyers have begun to seek plate resources from South Korea, Vietnam, Malaysia and other places. However, since the CFR prices of products in these regions are generally 50-80 US dollars/ton higher than China, the transaction is temporarily limited. ​

The South American steel industry has recently experienced normal fluctuations in market prices, and has also been affected by unexpected accidents and potential policy changes. Industry participants need to pay close attention to these dynamics to cope with future market changes.