Trading in the import basic pig iron (BPI) market in the US has accelerated in the past one and a half weeks, with up to four deals reported to have been signed during this period. Buyers have managed to achieve discounts from the initial offers. Although the buyers have not gotten exactly what they targeted, most suppliers needed to provide a good enough price to push volumes as they had a number of unsold cargoes.
Two major Brazilian exporters have signed deals for 50,000-55,000 mt each of BPI with 0.15 percent of phosphorus content to the US at $383-385/mt FOB South Brazil. Some market participants claim that the price in one deal was closer to $390/mt FOB, but this could be only including some financial expenses, and most sources agree that $385/mt FOB is the real level for the current market. Two deals from the abovementioned suppliers have been confirmed, for October and November shipment.
“Brazilian producers continue to be under pressure to sell, and prices could go down further in spite of the unfavorable exchange rate and the upcoming rainy season, as the current leeway for sellers is around 30 days as compared to 60 days under normal market conditions. Maybe this is the new normal,” a Brazil-based source said. On the other hand, some producers said that this price should be a bottom due to losses incurred. So far, there have been no production stoppages at pig iron plants in Brazil, so the future trend will still be dependent above all on the demand and the situation in the US.
The import CFR-based price in the abovementioned deals has been assessed at $410-412/mt CFR by sources, but a few market participants said that freight rates have increased by around 10 percent, which should be equivalent to a $2-3/mt rise, so the CFR price needs to be up to $415/mt CFR. “Scrap [busheling] is down by $20/gt in October. This is the main push down for pig iron,” a trader said.
In addition, the price for import BPI with lower phosphorus content of around 0.10 percent has declined to $420-425/mt CFR, while the previous tradable level in September was at around $435/mt CFR. A deal for ex-Ukraine pig iron of this higher grade was done at this price to the US.
The SteelOrbis reference price for import BPI in the US has settled at $410-425/mt CFR, down from $420-435/mt CFR since last week.
