The Brazilian export basic pig iron (BPI) market has been rather stable and silent in terms of trading over the past two weeks. But the outlook turned from bearish to more stable as all major sellers resist further declines.
According to a number of market sources, the lowest deal was done at $382.5-383/mt FOB in the first half of October and now most mills are sold out for November shipment. Another contract during the same round of sales was at $384-385/mt FOB as reported earlier. Offers have been very rare lately and exporters are sure that the downtrend has already finished. “Further decrease is impossible for us, for all of us,” a Brazilian producer said, adding that if steel mills in the US will keep insisting on discounts, pig iron production cuts are inevitable starting from November-December. The target in the next round of sales will be at or above $390/mt FOB, two market sources from Brazil believe.
At the same time, the local scrap prices are expected to move sideways in the US in November. At the moment, the tradable level for import pig iron is stable at $410-425/mt CFR with the lower end of the range corresponding to the high phosphorus material, the higher end – to the higher quality pig iron with the phosphorus content at around 0.10 percent.
There have been no bookings for Ukrainian pig iron confirmed lately. The price assessments for ex-Ukraine BPI to the US have been at $415-425/mt CFR. Also, Ukrainian pig iron has been offered at $420-425/mt CFR to Europe, up from the previous trading level of around $407/mt CFR as the highest and bids at below $390/mt CFR. High uncertainty in sales to Europe due to CBAM is preventing any trading movements, so producers have to pay attention to other markets. There has been a rumor about ex-Ukraine sale to Turkey. Though the final price level has not been confirmed by the time of publication, “it is not close to Europe prices – above $410/mt CFR in my opinion,” a trader said.