Import prices for basic pig iron (BPI) in the US are expected to keep moving up in March amid the hike in the local scrap market. This week, most sellers are waiting for a rise of around $10/mt in the next BPI deals to the US, but for the moment trading is limited and Brazilian exporters are inactive during the carnival.
New offers for ex-Brazil BPI with 0.15 percent phosphorus content have been reported at $445/mt FOB this week, up from the previous contract done at $435/mt FOB from South Brazil. In total, in the second half of February at least four cargoes were traded at $431-435/mt FOB, making sellers more comfortable now, looking for higher prices. “Almost everything is closed in Brazil because of the carnival. Upward scrap prices should support pig iron prices for a while. A group of producers asked for $445/mt FOB, but has not booked so far,” a Brazil-based source said. At least two mills said that they are not in active negotiations at the moment.
The abovementioned previous deals from Brazil to the US for high-phosphorus BPI have translated to $460/mt CFR New Orleans, but this week the tradable level is said to be at $465/mt CFR. Nevertheless, market sources are waiting for scrap prices in the US to settle first. The expectations for the hike in the local scrap market are by $20-30/gt for March, versus previous predictions at $30-40/gt, which is still sharper than the uptrend in pig iron, so it is assessed as positive by the market sources.
There is a rumor that Indian pig iron has been quoted in the US at $450/mt CFR, which has been assessed as either speculation or an old deal by market sources.
North Brazilian suppliers have been inactive in offering low-phosphorus BPI this week after a deal at $448/mt FOB around two weeks ago. Also, a week ago, a part of a full 50,000 mt cargo of Ukrainian low-phosphorus pig iron which has already rrived to the US was sold at $470/mt CFR. But for the next round of sales, sellers of low-phosphorus pig iron are expecting $480/mt CFR or above.
Since there have been no new contracts, the reference price for import BPI in the US has increased by just $5/mt to $465-475/mt CFR, taking into account higher offers and assessments for both high- and low-phosphorus materials. The ex-Brazil reference price for high-phosphorus BPI has settled at $435-440/mt FOB for now, up from $431-435/mt FOB last week.