Prices for basic pig iron (BPI) in the benchmark US import market have retreated further, following a lower-priced deal signed by one of the Brazilian sellers late last week. However, the market seems to have limited room to fall further, market sources believe.
The latest deal for ex-Brazil BPI with 0.15 percent phosphorus content has been signed at around $400/mt FOB, a few market sources told SteelOrbis, while the previous confirmed sale was at $410/mt FOB. Some market participants have said that new negotiations are already taking place at $5/mt lower, but there has been no confirmation that a contract has been signed. “I think the price fall will slow down, reaching the bottom at slightly below $400/mt FOB. Maybe the next deal is going to be the lowest,” a Brazil-based source said. Another source also said that some Brazilian mills will think about cutting production at current prices, while others will remain under pressure from US customers. “In general, bargaining power remains with US buyers and Brazilian mills are all in need of cash,” a European source said.
The recent deal price for Brazilian BPI corresponds to $425/mt CFR New Orleans, according to market sources. In the next round, buyers will target $420/mt CFR at best.
There has been a lack of firm offers for low-phosphorus BPI to the US and the tradable level is assessed at $435-440/mt CFR at the highest.
As a result, the import reference BPI price to the US (which includes both high- and low-phosphorus pig iron) has slipped to $420-440/mt CFR, versus $430-455/mt CFR last week.
Ex-Russia BPI trading has been on hold due to the holidays, though a bearish mood prevails. The reference price for ex-Russia Black Sea BPI stands at $310-335/mt FOB, with the midpoint at $322.5/mt FOB.