A major producer of foundry grade pig iron in Minas Gerais state, southeast Brazil, told SteelOrbis that he is now selling the product to traders in the US and Europe in the $320/mt to $335/mt range, FOB, against the level of $350/mt FOB reported three weeks ago.
The source mentioned that the plant remains operating at full capacity, having no problems with external demand, but prices are an issue that threatens profitability.
“Our production is sold until August and we are benefiting from the devaluation of the BRL, which has reduced the impact of local costs, but prices are approaching the level of production costs,” the source said.
A source from the pig iron producers association Sindifer told SteelOrbis that the production costs for the foundry grade product is estimated at $250/mt and $300/mt FOB for the steelmaking grade.
In the domestic market, the price of the foundry grade product is BRL1,100/mt ($344/mt), ex-works, all taxes except IPI, stable in BRL but reduced by 2.3 percent in $ terms due to exchange rate variation.
$1 = BRL 3.13