The uptrend in the ex-Brazil basic pig iron (BPI) market has accelerated this week with three deals signed with a significant price hike to a leading US importer. Further increases are not excluded due to positive outlook for the US market in March.
Two deals for 50,000 mt of Brazilian BPI (phosphorus content i0.15 percent) each have been done at $431/mt FOB, while the previous deal was heard a week ago at $415/mt FOB. The new level translates to $460/mt CFR, as the final price includes $4/mt of financing expenses and $25/mt freight from South Brazil to New Orleans.
“Most probably higher local steel prices in the US attributed to this. And also pig iron has risen because of higher scrap prices since January. I think other Brazilian [BPI] suppliers will try an even higher level,” a Brazil-based source said. As reported on Monday, Nucor raised its consumer spot price (CSP) by another $30/nt. Also, March scrap prices in the US Midwest are expected to increase by $30-40/gt ($30-41/mt) from February, though a few contacts predict some sales could be done $80/gt ($81/mt) higher as continued cold weather and equipment-related problems continue to impede the processing and delivery of local scrap, market insiders told SteelOrbis this week. This is after a hike by $45/gt ($46/mt) on average for scrap in February.
In addition, another deal for higher grade BPI from North Brazil with phosphorus content of 0.10 percent is reported to have been done at $448/mt FOB, while last week the tradable level was assessed at not above $430/mt FOB.
After increasing by $10.5/mt last week, the import BPI reference price in the US has surged by $22.5/mt on average to $460-470/mt CFR.