Prices for ex-Brazil basic pig iron (BPI) have been relatively stable after the drop seen last week. This has been confirmed in another deal done to the US. The expected stabilization of local scrap prices in the US in August and reduced BPI supply from Brazil may prevent prices from recording many further declines, at least in the near future, SteelOrbis has learned from the market.
A contract for 55,000 mt of ex-Brazil high phosphorus BPI was concluded at $400/mt FOB recently for September shipment. Though this is slightly below a deal done at $404/mt FOB early last week, market sources assume the price in the new deal is stable as it does not include the addition of finance expenses as in the previous one. The material will be shipped to the US with the CFR price at around $430/mt or just slightly below.
“Minas Gerais producers are under pressure, so they hope prices will not go much lower. Supply is being squeezed, so the market should start to stabilize but, that said, we are not convinced the world is going to become a better place in terms of actual steel demand,” an international trader said. Some Brazilian BPI producers have been holding back offers for September shipment as they do not want to sell at lower levels and have had to lower production plans. “Previously they were targeting $410-415/mt FOB, but now, even though the market is stable at $400/mt FOB, suppliers don’t want to be active in the market, as it can fall again,” a European source said.
Some market sources remain pessimistic though, saying that, with HRC demand in the US remaining slow and the Turkish seaborn scrap prices retreating further, sentiments cannot improve much in the BPI market. “It seems scrap will keep falling in Turkey... And the US mills commented to us they expect minus $20-30/mt for scrap [for August],” a European source said.