Slow demand and the first signs of a sharper-than-expected fall in the US domestic scrap market have resulted in a significant drop in basic pig iron (BPI) prices in new deals from Brazil to the US. The market has not expected the fall would be so rapid, but now it is clear that the US mills will keep targeting lower levels.
Two deals for 50,000-60,000 mt of BPI with 0.15 percent phosphorus content have been concluded over the past few days at $445/mt FOB and $450/mt FOB, SteelOrbis confirmed, down by $31/mt on average from the previous deal prices reported at $475-482/mt FOB last month. These contracts have been confirmed on the buyers’ side as well, with the CFR levels at $475/mt CFR and $480/mt CFR, including freight and financing.
Brazilian suppliers were first aiming to drop prices not so sharply, by $10-15/mt from the previous round, and so offers were at $465/mt FOB early in the week, but weak sentiments and the stronger-than-predicted fall in the US scrap segment have resulted in a deeper decline in prices from Brazil. “It seems there was no big demand in the market after deals from Ukraine, so Brazilians had to cut offers to sell,” a trader commented. Two lots of Ukrainian BPI with 0.12 percent phosphorus content were sold to the US at $515/mt CFR, as reported a week ago.
Since yesterday, new local scrap prices for June have started to emerge in the US, dropping by $50-60/gt, versus the expected previously $20-30/gt decline.