Prices for ex-Brazil basic pig iron (BPI) have fallen in a new deal to the US, which was not expected by most market sources given the increase in flat steel prices in the US and some expectations of a stabilization of local scrap prices in the country. Nevertheless, it seems the pressure from buyers has become the bigger factor impacting BPI prices.
A deal for 50,000-55,000 mt of ex-Brazil 0.15 percent phosphorus content BPI have been rumored as having been done to the US at $445-450/mt CFR this week, SteelOrbis learned from the market on June 21. A number of market sources agree that this deal is confirmed, while the second deal rumoured in the market has been denied by one of the major sellers. The FOB level from Brazil has slipped to $420-424/mt FOB. “The market looks like it may fall further,” an international trader said. The previous ex-Brazil deals were signed at $445-450/mt FOB, indicating that in this new round of bookings prices from Brazil have fallen by $25-26/mt.
“We thought prices are at bottom, but one seller decided to push volumes,” a market source said.
Domestic scrap prices in the US for July have not settled yet, but some scrap market sources say they feel that June scrap prices are at the bottom, given the latest increase in flat steel prices by the major US mills. However, some said that there could still be some $20 declines for prime grades.
Other suppliers than Brazil have been not so aggressive. The last tradable level for ex-India BPI has been reported at $420/mt FOB, translating to $460-470/mt CFR minimum. The latest negotiations with one of the Ukrainian suppliers were held at $480/mt CFR over the past few weeks.