A producer of the steelmaking grade pig iron in the northern state of Maranhao told SteelOrbis that he remains optimistic with improved prices still in Q1 2016, despite a small price reduction over the last few weeks.
He mentioned that the recent closure of Nucor’s DRI plant in Louisiana—due in part to the shortness of pellets supplied by Samarco—coupled with the barriers to imports of Chinese steel by the US, will ultimately increase the demand for steelmaking grade pig iron in Brazil, as a result from the rearrangement of the steel production chain in the US and Mexico.
He mentioned that his last export prices to the US, Mexico and Argentina were closed at $195/mt, CFR conditions, which translates into $185/mt FOB, given logistic costs estimated at $10/mt.
The figure compares to $200/mt CFR conditions one month ago, but despite the $5/mt reduction, the source believes that during Q1 2016 the price of the product will reach $240/mt, FOB conditions.
In November, the producers of the steelmaking grade pig iron in Maranhao state exported the product in average at $209/mt, FOB conditions, with prices negotiated in September.