A source from a major independent pig iron producer in the southeastern state of Minas Gerais told SteelOrbis that they are now paying BRL115/mt ($37/mt) FOB, full taxes conditions, for itabiritic iron ore lumps in the 6.35mm to 25mm thickness range, against a range of BRL120/mt to BRL125/mt one month ago.
“It is a relief for our finances, although small, as Vale remains charging $45.50/mt, FOB no taxes included, only PIS Cofins levies, for hematitinha, the hematite ore in the 6mm to 19mm thickness range,” he said, adding that the sector is paying for the ore more than the price received by Vale from its exports.
Itabiritic lumps and hematitinha are the main ores consumed by the sector, with a preference ascribed to hematitinha due to better physical performance in the blast furnaces, but price is usually a problem.
The source mentioned that they have closed one of its blast furnaces for maintenance, one year ahead of schedule, as the current prices of the pig iron are a threat to profitability.
He quoted market sources indicating that the steelmaking grade product is being sold in the domestic market at BRL720/mt ($220/mt), FOB, full taxes conditions, against BRL825/mt under the same conditions two months ago.
1 US$ = BRL 3.14 (July 14)