The Brazilian BPI market has failed to move in any direction, even after the major industry event, the IIMA meeting, held in Sao Paulo this week. Most major sellers say they are near to breakeven, so any further price decline would be not economically viable, while US buyers have been voicing bids $15-20/mt lower than the price in the last deal which was done in the second half of September.
The previous deal for ex-Brazil BPI with 0.15 percent of phosphorus content was done at $395/mt FOB, as SteelOrbis reported a week ago. At the moment, some Brazilian producers are offering at $400/mt FOB, trying to insist on the level seen in a number of deals in August, when market activity had revived. Some Brazilian exporters are ready to provide $390-395/mt FOB, which is still above buyers’ price ideas. A few producers have received bids from a major US mill at $375/mt FOB, while the maximum price given by US customers was at $380/mt FOB. “The general feeling among Brazilian producers is that $400/mt FOB is the breakeven point for most of them, especially with exchange rate at the current levels (around 5.30). More efficient producers could live with $390-395/mt FOB, but I don't think anybody will sell below this level at the moment,” a Brazilian source said. Another source confirmed that there are production reduction plans for November-December ahead of the rainy season seen in the December-February period.
Some market sources said that some small discounts around $5/mt are possible for end-of-October shipment cargoes, but US buyers will wait for at least $380-385/mt FOB to resume any firm negotiations for import pig iron. The market is more buyer-driven recently, and the pessimistic mood is also supported by expectations that prime scrap grade prices in the local market in the US will decline by $20-30/gt, while previously only declines of around $10/gt were foreseen.
The SteelOrbis reference price for ex-Brazil BPI has remained stable at $395/mt FOB, while the import BPI price in the US is stable at $420-435/mt CFR while new deals are awaited in order for the price trend to settle.
