Prices for ex-Brazil basic pig iron (BPI) have been unmoved, and no new deals and a very few offers have been seen in the market, as both buyers and sellers of BPI are waiting for September scrap prices in the US to settle first. Outlook for pig iron prices for September is rather pessimistic, though earlier in August the expectations were stable.
After last three deals to the US and Latin America signed at around $398-405/mt FOB from Brazil for BPI with 0.15 percent of phosphorus content, there have been no new transactions, SteelObris learned from the market. “Even offers are rare, as buyers are waiting for scrap prices,” one of Brazilian selling sources said. “Pig iron allocation is sold out up to second half/end September and producers are looking for October businesses. They will try to keep the last price level unchanged, although some of them admit this will be a tough task,” another source from Brazil commented.
At the same time, local scrap in the US is expected to move sideways to potentially lower, partially amid new reports that September-November mill maintenance programs could further limit local mills’ raw material purchases.
Strong position of US mills in negotiations for pig iron imports has added to slow local market in Brazil. In particular, the local pig iron price in Brazil corresponds to around $380-385/mt FOB and sales volumes are declining “as local steelmakers are operating at a slower rate due to increasing steel imports and a rather bearish industrial performance in Brazil,” a source said.
The reference price for import BPI in the US has remained stable this week at $427-440/mt CFR, with the mid-point at $433.5/mt CFR. The lower end of the range ($427-430/mt CFR) corresponds to latest deals for Brazilian high-phosphorus BPI, while the higher end ($435-440/mt CFR) reflects a sale of Ukrainian pig iron heard earlier this month.
As for October shipment deals, market sources are expecting from $395-400/mt FOB – which is almost the same as seen in transactions for September, but some believe that the market could dive to $385-390/mt FOB or even lower.