The price of raw materials for the Brazilian independent pig iron producers are roughly stable for the second month, a major producer in the southeastern state of Minas Gerais told SteelOrbis.
According to the source, the company has recently closed an acquisition of small lumps, also called hematitinha, the sector’s preferred iron ore grade, supplied by Vale, at $54/mt, ex-mine, no taxes but Pis Cofin levies included, the same price of two months ago.
The alternative ore, itabiritic lumps in the 6.35mm to 25mm thickness range, remains offered by small miners at BRL123/mt ($47.67/mt), CFR full taxes, also the same price of two months ago.
The source said that under such price conditions, the two products offer the same result in financial terms, in spite of the better physical performance of the hematitinha in their blast furnaces.
For charcoal, used by the sector as reductant in the production process, reference prices are also stable, BRL125 ($48) per cubic meter of the product.
The source unveiled expectations of a reduction of prices for the raw materials, as iron ore prices are falling in the international markets, while the production of charcoal is set to increase in line with the severe drought that hits the southeastern region of Brazil.
$1 = BRL 2.60