New deals for ex-Brazil basic pig iron (BPI) have been widely discussed in the market this week with the FOB prices gaining up to $10-12/mt, while an even bigger increase has been seen on CFR basis in the US amid the increase in logistics costs.
In particular, two different exporters said they sold one large BPI cargo to the US each at $455/mt FOB, but some market sources said that at least one of these deals may include $4/mt in financial costs. In any case, the new tradable level has been evaluated by most market sources at $450-455/mt FOB, versus $440-445/mt FOB in the previous round of sales.
At the same time, freight from southern Brazil, from where most of the volumes of pig iron with 0.15 percent phosphorus content are coming, to New Orleans has been assessed at $28-30/mt, against $25/mt seen earlier, before the recent surge in oil prices. The CFR prices in the above-mentioned deals have been reported at $483-485/mt CFR. “While scrap was sideways, steel continued to rise [in the local market in the US] and is now $1007/nt [Nucor HRC FOB price]. In addition, pig supply is tight right now and freight is up on fuel costs, so there are several reasons for continued firming in prices,” a US-based source said.
Ukrainian pig iron was also on offer at $480/mt CFR since last week, but for now this level is assessed as already below expectations.
In addition, US suppliers have rather limited alternative options for Brazilian pig iron with rather fast shipment, with no offers heard for import HBI. There has been no confirmation of aggressive ex-India BPI offers that were rumored at $450-460/mt CFR to the US last week. On March 11, the US initiated investigations under Section 301(b) “relating to structural excess capacity and production in manufacturing sectors”, with the targets not only China and the European Union, but also Indonesia, Malaysia, Vietnam, Mexico and India.
The SteelOrbis reference price for import BPI in the US has settled at $480-485/mt CFR, based on the latest deals, moving up by $17.5/mt on average from early March, while the ex-Brazil BPI reference has added $12/mt to $450-455/mt FOB.
Higher Brazilian BPI offers have also been seen in Europe. Some offers at as high as $495-500/mt CFR have been reported to Italy this week, up from $485/mt CFR last week. “Probably the US can buy at these prices [$450-455/mt FOB], but not others,” a European source said. The tradable price level for Italy is still at $480/mt CFR at the highest, with no support from customers.
