Amid the concerns over potential shortages in supply of raw materials, US customers have continued actively to restock their inventories of basic pig iron (BPI). “It is not a surprise for me since there are still US buyers out there, who need to replenish stocks or believe in continuous scrap shortage,” a major international trader stated. On the other hand, most market participants in the US have continued to question to question the sustainability of the price increase due to a lack of downstream demand, still high inflation, and a looming recession in the US.
Accordingly, yesterday, January 25, SteelOrbis learned of two fresh ex-Brazil BPI deals, for 55,000 mt each, with shipment in April, done to the US. Although, the prices were claimed to be at $480/mt FOB by the Brazilian suppliers, global market insiders believe that the deals in question were concluded at $475/mt FOB at the highest. Simultaneously, the CFR-based prices have yet to confirmed. While the Brazilian sellers have stated that the CFR price may be $510/mt, given the freight and finance costs, other market players are confident that the prices for end-users should not be above $500/mt CFR. “Following a recent decline in freight rates, with absolute certainty it is possible to find freight at below $25/mt,” a source stated.
On balance, though Brazilian BPI suppliers have succeeded in sales at higher prices to the US, they continue to target higher levels which still remain unacceptable for most buyers. As SteelOrbis reported previously, at the beginning of January a deal for ex-Brazil BPI to the US was done at $490-495/mt CFR Port of New Orleans, considering the freight and finance costs, while late last week a Ukrainian steel mill succeeded in selling a BPI cargo at $505/mt CFR Port of New Orleans.