A source from a major pig iron independent producer in the state of Maranhao, northeast Brazil, told SteelOrbis that his last deals to export the steelmaking grade product to the US were closed at $245/mt, CFR conditions, roughly equivalent to FOB $235/mt.
The price compares to $284/mt, CFR conditions, one month ago, and according to the source the reduced price reflects competition from scrap prices, which declined in the US market.
“The US demand remains strong and I could have all my production sold there, but the problem is the price, which has narrowed our margins,” he said.
Meanwhile, a small producer in the southeastern state of Minas Gerais told SteelOrbis that his last export deal was closed at $222/mt, FOB conditions, against $257/mt one month ago.
“I have no problem in exporting my entire production, which is small, but prices are a problem,” he said, adding that, in contrast, the volume of his sales in the domestic market declined on yearly basis by 35 percent, currently at BRL700/mt ($200/mt), compared to a range of BRL718/mt to BRL756/mt, FOB conditions, one month ago.
In July, Brazil exported the steelmaking grade pig iron in average at $249/mt and the foundry grade at $288/mt, both FOB conditions, price deals probably closed in May.
Independent producers in the northern states of Para and Maranhao are focused in the production of the steelmaking grade for export, while those in the southeastern states of Minas Gerais and Espirito Santo produce the steelmaking and the foundry grades, to serve both the domestic and export markets.
1 US$ = BRL 3.47 (August 20)