After a silence in ex-Brazil basic pig iron trading seen in June and most of July, Brazilian producers have become more active in negotiations, following the exemption of pig iron from the US’ Section 301. However, even though Brazilian sellers are more or less optimistic, US buyers have been resisting any high offers as there have been previous low-priced purchases from Brazil.
The only deal for ex-Brazil BPI is reported to have been done to Mexico at $520/mt CFR recently. The FOB price level has been assessed at $480-485/mt FOB, though a lot of uncertainties have been heard in terms of the FOB price level, with some sources hearing even lower levels.
A number of producers in Brazil have been asking for $530/mt CFR in the US, a deal price seen before the tariff negotiations started. “But I have no idea whether the Brazilians will succeed. All of the producers seem to be uncertain about these negotiations, the main reason being the recent sales and offers by India at much lower levels,” a Brazil-based source said. SteelOrbis has confirmed a number of deals done around ten days ago at $480-485/mt CFR at the lowest for Indian BPI in the US. Considering that there are more impurities in Indian pig iron cargoes, this price translates to $505-510/mt CFR for base quality Brazilian material.
Though some offers from India can still be found at $430-435/mt FOB (or around $485/mt CFR to the US), trading with India has also been on pause recently. “Right now, there are no deals since everyone is waiting for the Section 301 labour ruling,” a trading source commented. A separate investigation to assess bans on imports produced with forced labor under Section 301 is expected to be finalized soon and may lead to tariffs of 12.5 percent (both India and Brazil are under investigation).
There have also been some negotiations for Brazilian BPI in Europe at $520/mt CFR (translates to $475-480/mt FOB), but producers have been assessing the price level as low, and, what is even more important, there has been a lack of August shipment material. “Many have material only for end of September [shipment]. Some producers secured volumes for deliveries under medium-term contracts with domestic buyers, so they don’t have allocation for other customers until September,” the representative of a Brazilian mill said.
As a result, for now the ex-Brazil BPI reference price is assessed at $475-495/mt FOB, almost in line with the level seen in the middle of July.
In US, the import BPI price level has settled at $510-520/mt CFR, versus $515-520/mt CFR earlier.
