The Brazilian miner Vale and the country’s independent pig iron producers have not yet commenced negotiations on the price of small lumps, in the 6mm to 19mm thickness range, locally known as hematitinha, the main iron ore consumed by the pig iron producers in their blast furnaces.
“We need a reduction of the current price, $40.50/mt, ex-mine, no taxes included, as it is not compatible with the current price of the pig iron, $170/mt, FOB conditions for export, for the steelmaking grade product,” a source from a pig iron producer told SteelOrbis, adding that the meeting between Vale and pig iron producers has already been postponed twice, now set for the end of this week.
The source mentioned that the producers dedicated to the steelmaking grade have either stopped operations or are feeding on alternative, low quality lumps, to maintain operations, paying $28.50/mt, ex-mine, no taxes included, reducing their production costs but incurring in operational problems derived from the poor quality of the ore.
According to the source, most of the producers dedicated to the steelmaking grade product have already stopped operations, while those dedicated to the foundry grade continue to operate, although at low pace, as the premium of the product in relation to the steelmaking grade can compensate for the absence of profitability of the lower priced product.