After the rise of $10/mt already recorded in February, Brazilian basic pig iron (BPI) exporters have been targeting further increases. But resistance from the buyers, especially from the US, has been stronger. Sellers hope that the European market may provide support, but so far no deals at higher price levels have been heard.
According to market sources, after the previous deals done at $430-435/mt FOB, trading has slowed down. But while last week market sources were discussing one contract done at $435/mt FOB, this week information about two vessels sold at this level to the US has been disclosed. “There have been no new transactions yet, but the targets are at $440-445/mt FOB,” a Brazilian source said.
The highest tradable level for Brazilian BPI with 0.15 percent phosphorus content in the US has been at $460/mt CFR. But in March US Ohio Valley prime bushing scrap price is expected to be at least stable at February’s levels of $452-462/m or even lower. So, US customers will be able to offer much stronger resistance to further rises in pig iron prices.
Suppliers hope for support from the European market. “Europe is pushing for our material, but $440/mt FOB has not been done,” a Brazil-based source said, confirming that the previous contracts for Brazilian material in Europe were done at the equivalent of $430/mt FOB or near $465-470/mt CFR.
The reference price for ex-Brazil BPI has been corrected up only slightly from $430-435/mt FOB to $430-440/mt FOB, considering the higher offers this week.
